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1 

2 

3 

4 

5 

6 

OLD  AGE  DEPENDENCY 

IN  THE 

UNITED  STATES 


THE  MACMILLAN  COMPANY 

MEW  YORK  •  BOSTON  CHICAGO 
DALLAS  ■  SAN  FRANCISCO 

MACMILLAN  &  CO.,  Lihitbii 

LONDON  •  BOMBAY  ■  CALCUTTA 
MBLIOURNB 

THS  MACMILLAN  CO.  OF  CANADA,  Ltd 

TOKMTO 


OLD  AGE  DEPENDENCY 

IN  THE 

UNITED  STATES 

A  COMPLETE  SURVEY  OF  THE  PENSION 
MOVEMENT 

BY 

LEE  WELLING  SQUIER 


Wfto  Ifotit 
THE  MACMILLAN  COMPANY 
1912 

AU  rit^u  rutrvtd 


CorVKWHT,  t9l*, 

Bv  THE  MACMILLAN  COMPANY. 


Set  up  Mid  electiatypad.  PubUfbed  April,  191s. 


KettisoB  9nM 

J,  B.  Caibtof  Co.  —  Berwick  *  Bmltii  Co. 
Rorwo  id,  IIm8,,  IT.S,A. 


PREFACE 

This  book  is  primarily  the  outcome  of  an  atten^)! 

to  find  an  answer  to  the  query  that  sooner  or  later 

comes  into  the  mind  of  every  pracUcal  insurance 
man,  in  field  or  office,  "Why  do  not  working 
people  purchase  annuities, -the  simplest,  surest  and 
safest  means  of  providing  against  want  in  old  age  ?" 

Answers  to  this  query  from  representative  indi- 
viduab  in  the  various  classes  of  wage-earners  expressed 
uniformly  this  sentiment:  "It  is  hard  enough  to 
keep  soul  and  body  together  day  by  day.  How,  then, 
can  we  make  any  provision  for  the  future  ?  " 

The  investigaUon  was  then  directed  to  ascertain 
whether  this  sentiment  was  expressive  of  in  h\  idual 
improvidence  and  pessimism,  or  was  descript. .  a 
universal  condition,  li  the  latter,  then  what  is 
done  by  employers  of  labor  and  through  legi^tive 
channels  to  remedy  this  deplorable  condition  ? 

Publir  ,  collegiate  and  technical  Ubrariesgave  little 
iight  on  this  subject.  Current  Hterature  was  all  but 
silent,  except  for  an  occasional  magazine  article  or 
newspaper  reference  to  some  corporation  pension  plan 
Hundreds  of  letters  -  in  all  nearly  two  thousand 
-were  addressed  to  corporations,  employers,  states 


vi  PREFACE 

citks  ;ind  other  sources  of  possible  information. 
From  the  ready  and  courteous  replies  received,  in- 
form.it  ion  was  at  hand  showing  the  trend  of  the 
whole  pension  thought  in  America. 

This  book  attempts  to  summarize  that  thought 
and  present  it  in  such  form  as  ihat  it  will  be  avail- 
able to  all  who  may  be  interested  in  the  solution  of 
one  of  our  greatest  national  problems,  —  now  eco- 
nomic and  industrial,  but  rapidly  becoming  political. 

The  writer  casdaims  any  bias  towards  socialisn;, 
either  as  dogma  or  rractice.  If  his  conclusions  do 
not  sustain  this  disclaimer,  it  is  because  the  logic  of 
the  facts  disclosed  in  his  investigations  is  inexorable. 

To  every  one  of  the  large  nimiber  of  those  who 
have  so  kindly  furnished  him  information  during  the 
many  months  this  investigation  has  been  carried 
forward,  the  author  expresses  profound  gratitude; 
for  they  have  enabled  him  to  assemble  their  individual 
thoughts  and  recount  their  commendable  efforts  as 
pioneers  in  leading  the  way  to  the  ultimate  goal  for 
every  man  and  woman  in  America,  —  an  old  age 
free  from  dread  and  want. 

Philadelphia,  December,  191 1. 


CONTENTS 


PART  T 

DEPENDENT  '    •  tNNUATION 
Extent  and  Cost  .  . 

I'ART  II 
CAUSES  OF  OLD  AGE  DEPENDENCY 

vHAPTRR 

I.     MiSFORTfNK  .... 

II.   Low  Wages  ... 


3-17 


II. 
M 
IV. 


V. 
VI. 


VII 


PART  III 

EFFORTS  AT  RELIEF 
I.  Lat  n  Organizations  . 
Fr     rnal  Bbnei  XT  Societies 

Ind  ,VRIAL  Establishmkn'ts  . 
Transportation  Companies  . 

A.  Steam  Railroads 

B.  Electric  Lines 

C.  Steamship  Companies  . 
Teachers'  Retirement  Firarns 
Municipal  Provisions  . 

A.  Police  Pensions 

B.  Firemen's  Pensions 

C.  Other  Municipal  Employees 
Government  Pensions  . 

vii 


24-38 
38-50 


55-66 
67-71 
72-108 

109-  138 

1 10-  128 
128-136 
136-138 
'39-»92 

193-  228 

194-  211 

211-222 
223-228 
229-235 


viii 


CONTENTS 


PART  IV 
PLANS  FOR  PREVENTION 

CHAPTER  FACES 

I.   Thrift   245-261 

II.  Pensions  by  PtmcHASB   262-294 

A.  Insurance  Companies'  Annuities     .       .  263-270 

B.  Deductions  from  Wages  ....  271-282 

C.  State  Annuities   283-294 

III.  Pensions  for  Service   295-324 

Conclusion      ....            ...  324-338 

Appendices   339-347 

A.  A  Bill  to  Provide  Old  Age  Pensions  .      .      .  339-343 

B.  A  Bill  to  Organize  an  Old  Age  Home  Guard  in 

the  United  SUtes  Army       ....  344-347 

Indices   349-36' 


FOREWORD 


Mr.  Squier's  book,  "Old  Age  Dependency  in  the 
United  States,"  is  much  the  most  comprehensive  and 
discriminating  presentation  of  the  subject  which  has 
come  to  my  notice.    It  is  most  timely,  in  view  of  the 

increasing  interest  in  the  subject. 

The  evidence  here  collected,  that  there  is  here  a 
great  and  growing  volume  of  distress,  due  to  the 
infirmities  of  age,  will,  no  doubt,  administer  a  shock 
to  many  complacent  citizens.  Such  will  also  be  dis- 
appointed to  learn  that  we  are  making  use  of  the 
most  haphazard,  expensive  and  least  efficient  methods 
of  providing  for  the  same,  most  of  which  have  been 
abandoned  in  the  leading  European  countries  and  in 
Australia  and  New  Zealand  after  due  trial  Want 
of  information  on  the  subject  and  the  great  opportu- 
nities afforded  the  individual  in  this  country  have 
obscured  the  fact  that  so  many  of  our  people  reach 
old  age  witht  ut  provision  for  their  support. 

These  unfortunates  —  what  irony  it  is  to  call  men 
and  women  who  live  long  "  unfortunates  !  "  —  often 
find  themselves  in  this  plight,  because  out  of  their 
small  incomes  they  have  generously  responded  to  the 

ix 


X 


FOREWORD 


call  of  duty  in  caring  for  families,  providing  for  edu- 
cation of  children  and  the  like.  Many  others,  who 
v/ere  sparing  in  expenditure  in  order  to  provide  for 
old  age,  have  been  defeated  by  unwise  investment, 
failure  of  banks  or  insurance  companies,  unsuspected 
forfeiture  conditions  or  some  other  catastrophe. 

In  the  account  of  what  is  being  done  in  the  United 
States  is  found  the  germ  of  three  entirely  distinct 
methods  of  making  such  provision,  each  of  which  has 
been  much  more  developed  and  on  a  much  larger 
scale  in  other  countries  :  — 

1.  By  a  "service  pension,"  freely  granted  by  em- 
ployers or  by  the  state  to  workingmen  who,  having 
fulfilled  the  conditions,  reach  a  certain  age.  When 
such  pensions  are  paid  by  the  state,  they  are  "  serv- 
ice pensions,"  even  though  not  granted  when  the 
income  from  other  sources  exceeds  a  certain  amount, 
for  in  that  case  it  is  assumed  that  the  state  has 
ab-eady  indirectly  supplied  the  support  for  old  age. 

2.  By  a  "  compulsory  "  system  of  contribution  to  a 
pension  fund.  Such  compulsion  is  exercised  some- 
times by  employers  or  by  municipalities  or  other 
departments  of  the  state.  Usually  the  employer  or 
the  state  or  both  also  make  contributions  in  the  last- 
mentioned  form.  This  is  a  well-known  branch  of  the 
"social  insurance"  of  Germany.  Such  funds  are, 
upon  actuarial  investigation,  usually  found  to  be 
insolvent,  that  is,  not  to  contain  sufficient  amounts. 


FOREWORD  jg^ 

SO  that  together  with  future  contributions  and  interest 
they  will  finance  out  This  technical  insolvency  may 
not  be  important  if  state  or  national  compulsion  is 
behind  the  insurance. 

3.  By  encouraging  the  purchase  of  old  age  annui- 
ties.   This  is  usually  done  by  the  employer  or  the 
state  or  both  offering  a  subsidy  in  the  form  of  paying 
a  portion  of  the  contributions,  guaranteeing  a  higher 
rate  of  interest  than  could  otherwise  be  secured,  as- 
suming responsibility  for  the  custody  and  investment 
of  the  funds,  without  charging  for  expenses,  or  by  a 
combination  of  two  or  more  of  these.    This,  being 
voluntary,  works  in  a  haphazard  manner,  and  under  it 
experience  shows  that  no  provision  is  made  for  those 
for  whom  provision  is  most  needed. 

All  of  these  fundamentally  diflferent  methods,  with 
many  variations  of  the  same,  as  they  are  found  in 
practice,  are  briefly  outlined  in  this  book,  and  the 
further  suggestion  that  wages  might  be  increased  so 
that  workmen  may  make  voluntary  provision  for  old 
age,  without  neglecting  the  duties  now  imposed  by 
the  present  standard  of  living,  is  also  considered. 
It  has  not  been  shown,  however,  that  in  countries 
where  wages  are  highest,  a  smaller  proportion  of 
workingmen  are  dependent  in  old  age.    On  the  con- 
trary, the  proportion  is  believed  to  be  less  in  France 
than  in  Great  Britain,  though  wages  are  higher  in 
Great  Britain. 


FOREWORD 


These  and  many  other  considerations  which  are 
not  presented  as  arguments  in  this  book  are  neces- 
sarily suggested,  together  with  many  others,  by  the 
facts  and  immediate  inferences  from  the  facLs,  and 
in  the  solution  of  such  problems  which  must  inevi- 
tably come  before  employers,  associations  of  work- 
ingmen  and  state  and  national  legislatures,  this 
impartial  compilation  of  facts,  figures  and  principles 
will  certainly  be  of  great  utility. 

Not  the  least  valuable  of  its  features  is  the  inter- 
esting and  even  entertaining  manner  in  which  all  this 
valuable  information  is  imparted. 

MILES  M.  DAWSON. 


PART  I 
DEPENDENT  SUPERANNUATION 


OLD  AGE  DEPENDENCY  IN  THE 
UNITED  STATES 


PART  I 

Dependent  SuPERANNUAnoN 

Extent  and  Cost 

It  is  estimted  that  thee  .«  x8,ooo,ooo  wage- 
earners  «  the  Ut^'ted  Sutes.   The^e  are  aprro^- 

r  ™8«a»«s  who  have 

reached  the  age  of  skty-fiv.  years  in  want  and  .r.  now 
-pi^rted  by  charity,  pubHc  and  privat.  I„  „3 
.-mbers,  u  is  costing  this  country  $„o,oo<,,ooo  a  year 
for  he  support  of  this  great  host  of  wom^m  toUen. 
Magnuude  ,s  best  realized  by  compari«>n.   At  the 

rS7^coo   men  engaged.    At  the  batUe  of  Waterloo, 
there  were  approrimately  .8.,ooo  •■  nren  on  the  field 
The  Stan  ,ng  rrmy  of  France  numbers  610,000;  that 

f  Genn^^y  about  the  same;  that  of  Russia  bou 
r,»6,ooo.'   The  British  arm>  consisting  „f  regulars 
a-d  reserves,  numbers  37;,ooo;  including  the!Li. 

•/Wi.,  Vol.  II,  page  6,0 


I. 


4    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

iary  and  colonial  forces,  Great  Britain  has  1,340,000 
men  trained  to  defend  her  world-wide  empire.'  The 
worn-out,  indigent  veterans  of  the  industrial  army  of 
the  United  States  outnumber  the  largest  standing 
army  of  the  greatest  military  nation  in  the  world ; 
and  the  cost  of  maintaining  this  helpless  mass  of  de- 
pendents averages  more  than  two  d-  'lars  annually  for 
each  man,  woman  and  chUd  in  this  coimtry. 

With  a  population  of  80,000,000,  it  would  not  seem  extrava- 
gant to  place  the  cost  to-day  at  upwards  of  $100,000,000.  But 

these  fiRuros  represent  only  a  fraction  of  the  real  direct  cost  of 
maintaining  the  poor  and  dependent.  The  multiform  expendi- 
tures of  private  charity;  the  endowments  of  hospitals  and  homes 
for  the  poor,  the  infirm,  the  sick,  the  aged;  funds  dispensed 
through  the  agency  of  churches,  salvation  armies,  and  semi- 
benevolent  societies;  contributions  made  at  street  corners  of 
cities  and  in  response  to  solicitations  from  door  to  door;  the 
promiscuous  giving  everywhere  without  investigation,  system, 
or  record,  —  these  probably  constitute,  in  the  aggregate,  a 
larger  item,  perhaps  many  times  larger,  than  that  which  is 
represented  by  poor  rates.* 

'  No  more  serious  problem  confronts  any  military  na- 
tion of  Europe  than  this  which  confronts  the  peaceable, 
industrial  people  of  the  United  States. 
,  These  figures  are  only  approximate,  as  reliable  statis- 
tics relating  to  this  problem  have  not  been  compiled. 
They  are  based  largely  upon  the  report  of  the  Commis- 
sion on  Old  Age  Pensions,  Annuities  and  Insurance  to 

>"Encv.  Brit  ,"  nth  ed.,  Vol.  II,  page  610. 
"Lewis,  "State  Insurance,"  page  20. 


DEPENDENT  SlTPEKANNUAnON 


the  Goieral  Court  ol  Massachusetts,  md&  date  of 
January  15,  1910  (page  2a).  This  Commission  was 
appointed  by  legislative  authority  and  was  supplied 
with  public  funds  for  making  a  thorough  investiga- 
tion into  the  living  conditions  of  the  population  of 
Massachusetts,  over  sixty-five  years  of  age. 

The  Commission  reports  177,000  persons  in  the 
state  of  Massachusetts  sixty-five  years  of  age  and  over. 
Of  these,  135,788  arc  classed  as  "non-dependent," 
though,  as  the  Commission  says  (page  45) :  — 

The  line  between  the  dependent  and  the  non-dependent  poor 
cannot  be  drawn  sharply.  It  is  not  to  be  understood  that  no 
person  who  has  received  any  outside  assistance  ndiatever  has 
been  included  in  this  class  of  non-dependent  aged  poor.  Occa- 
sional aid  from  relatives,  friends,  or  neighbors,  or  even  from  a 
church,  society,  or  settlement,  has  not  been  consid  red  to  con- 
stitute dependency  in  the  proper  sense.  Only  assistance 
received  through  the  regular  channels  of  charity,  public  and 
private,  has  been  taken  into  account  in  determining  the  inclu- 
sion of  a  doubtful  case  in  the  non-dependent  class. 

Taking  the  Commission's  view  of  the  matter,  as 
amply  sustained  by  its  careful  researches,  it  appears 
that  there  are  41,212  people  in  the  state  of  Massachu- 
setts, sixty-five  years  of  age  and  over,  who  are  de- 
pendent upon  charity.  Using  the  Commission's  table 
as  a  basis  and  computing  the  dependent  population 
throughout  the  United  States,  sixty-five  years  old 
and  over,  the  classification  of  iLe  dependent  popula- 


6    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

tion  over  sixty-five  and  the  cost  «>r  its  maintenance 
may  be  represented  in  the  following  table :  — 

TABLE  I 

DznNDENT  PorounoN  Sbcty-uve  Yea«8  Ow  and  Over 


Bow  Pbovioid  Fm 

Uau. 

U.S. 

AimvAt  Con. 

U.S. 

I.  In  Correctional 

Institutions . 
3.  In  Insane  Asy- 
lums and 

iS>i8o 

(Not  given) 

(No  estimate) 

Hospitals 

3-  In  Almshouses . 

4-  In  Benevolent 

i,q6i 
3,480' 

53,544 
95,128 

(Not  given) 
•693,076.80 

(N'o  estimate) 
*>8,973,279.6o 

Homes   .  . 

S-  By  Public  Out- 

i>S98 

71,024 

783,556.80 

21,420,83840 

door  Relief  . 
6.  By  Private  Out- 

3.07s 

83,996 

189,900.00 

5,181,081.37 

door  Relief  . 
7-  By  United 

2,31-2 

63,112 

330,998.00 

8.734.700.80 

States  Pen- 

sions .  . 

744,188 

4,192,875.00 

114,590,068.24 

Totals  .    .    .  j 

41,212 

1,123,173 

(6,i8o,i^.6o 

1178,899,968.41 

The  Commission  gives  this  number  on  pages  22,  29  and  31  of  iu 
Keport;  and  on  pages  35,  36,  44  e:  scq.,  the  number  is  given  as  2474. 
For  conservative  comparison,  the  smaUer  number  is  used  as  an  aj- 
proximately  correct  basis. 

'  While  it  is  true  that  in  the  Southern  states  there  are  few  "United 
SUtes  pensioners,  there  are  thorsands  of  "Confederate  States" 
p^ioners.  (17,/.  nages  207-208.)  From  statistics  furnished  by  a 
few  of  the  Southern  states,  there  is  every  reason  to  conclude  that  the 
basts  here  given  for  computing  the  "war"  dependents  throughout  the 
nation  is  consovative. 


i 


DEPENDENT  SUP  SRANNUAnON  7 

The  figures  in  the  al)cvc  table  are  sufficiently 
startling  to  need  no  commcit.    b  may  be  questioned 
by  some,  however,  whether  the  proportion  of  indi- 
gent, aged  people  in  Massachusetts  will  fairly  be 
nuiintained  throughout   the  United   States,  —  the 
ground  of  this  criticism  being  that  Massachusetts  is 
largely  an  industrial  state  and,  therefore,  shows  a 
much  larger  percentage  of  aged  indigents  to  the 
general  population  than  ^rill  be  found  in  the  agricul- 
tural states.  The  ground  of  this  criticism,  however, 
is  necessarily  temporary  in  view  of  the  trend  of  the 
population  from  agricultural  districts  to  manufactur- 
ing centers  noticeable  throughout  the  entire  country. 
Henry  Gannett  in  his  article  on  "The  Population  of 
the  United  States,"  in  the  National  Geographic  Maga- 
zine for  January.  191 1,  comments  on  this  subject,  as 
follows  (page  43) :  — 

In  everj'  state  the  urban  element,  defining  it  as  i.bove,  has 
grown  more  rapidly  than  has  the  rural  element,  or  the  re- 
mainder of  the  population,  in  a  number  of  cases  many  times  as 
rapidly.  Thus,  in  New  York,  while  its  cities  have  increased 
42  per  cent,  the  rural  element  has  grown  only  2  per  cent ;  in 
Massachusetts  the  corresponding  proportions  are  32  per  cent 
and  4  per  cent,  and  in  Ohio  48  per  cent  and  1  per  cent.  The 
cities  have  shown  a  very  rapid  growth,  ranging  from  141  per 
cent  in  Oregon  and  140  per  cent  in  Washington,  down  to  13 
per  cent  in  Kentucky  and  14  per  cent  in  Delaware  and  Mary- 
land. 

Mr.  Gannett  also  shows,  by  a  table  of  percentage  of 


8     OLD  AGE  OEPBNOSNCY  IN  THE  UNITED  STATES 

increase  in  population  among  cities  throughout  the 
United  States,  that  there  were  thirty-eight  cities  in 
X900  having  100,000  or  more  inhabitants  each; 
while  the  number  of  such  dties  in  1910  has  grown  to 
fifty  (page  44).  Some  of  these  cities  have  made  a 
remarkable  increase  of  population,  —  Birmingham, 
Alabama,  245  per  cent ;  Los  Angeles,  California,  21a 
per  cent;  Seattle,  w^ashington,  194  per  cent;  Spo- 
kane, Washington,  183  per  cent;  Portland,  Oregon, 
129  percent;  Oakland,  California,  124  per  cent;  etc. 
It  cannot,  in  view  of  these  facts,  be  doubted  that 
the  problem  of  me  indigent  poor,  as  thoroughly  in- 
vestigated in  Massachusetts,  is  rapidly  becoming 
nation  wide. 

Again,  some  one  may  question  the  estimate  con- 
tained in  Table  I  of  the  ahnshouse  population  in  the 
United  States,  viz.,  95,128  in  1909;  the  basis  of  this 
question  being  found  in  the  number  of  ahnshouse 
population  above  sixty  years  of  age,  as  given  in  the 
report  of  the  Censiis  Bureau  of  the  United  States 
government,  for  1904,  showing  69,106  as  agamst  the 
estimate  of  95,1 28.»  It  wil!  appear  from  this  com- 
parison that  Table  x  .ihows  an  increase  of  26,022 
paupers  sixty-five  ycurs  old  and  over  in  almshouses 
throughout  the  country  in  the  six  years  from  1903 
to  1909.  That  this  increase  is  not  exaggerated  will 
•  "Paupers  in  Almshouses,"  page  aa. 


DEPENDENT  SOTEKANNUATXON  9 

be  shown  from  a  consideration  of  the  fact  ihat  the 
Census  Bureau  tables '  show  that  there  were,  in  1903, 
1373  paupers  in  almshouses,  in  x^assachusetts,  above 
the  age  of  sixty-five  years.  The  Massachusetts  Com- 
mission gives,  as  per  Table  I,  the  number  in  1909, 
in  alm^ouses  in  the  state,  of  the  same  age,  3474, 
showing  an  increase  of  80  per  cent  in  the  six  years 
under  consideration.*  Sixty-five  per  cent  in'- 
therefore,  of  the  total  population  in  a?"-  '  ^ 
throughout  the  country  in  1904  —  69,10c  wovdd 
show  an  increase  of  26,918,  bringing  the  total  lUmber 
up  to  96,024  instead  of  95,128,  as  contained  in  Table 
I  for  representing  the  ahnshouse  population  in  the 
United  States,  above  sixty-five  years  of  age.  The 
Census  Bureau  points  out '  a  decrease  of  paupers  in 
almshouses  per  100,000  of  the  population  from  ri6.6, 
June  I,  x8oo,  to  104.4,  December  31,  1903.    It  is  not 
to  be  presumed,  however,  because  of  this  showing, 
that  pauperism  generally  is  decreasing  in  the  United 
States.  The  Census  Bureau  report  comments  on  this 
phase  of  the  question,  as  follows :  *  — 

'  "Paupers  in  Almshouses,"  pages  138-139  and  142-143. 

•  Tnquiry  into  the  growth  of  almshouse  population  in  some  of  the 
Western  agriculturiil  states,  however,  shows  that  80  per  cent  increase 
for  the  six  years  under  review  may  be  too  high.  From  comparative 
data  at  hand,  65  per  coit  may  be  takes  as  coiuervi>^ive  for  the 
country  at  large. 

• "  Paupers  in  Almshouses,"  page  7, 

*  "Paupers  in  Almshouses,"  page  8. 


10  OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

In  earlier  times  the  almshouses  were  the  ordinary  insUtu- 
tions  for  the  care  of  unfortunates  of  nearly  every  class  A 
gradual  segregaUon  has  been  going  on,  and  thousands  who 
formerly  would  have  sought  the  almshouse  as  the  only  refuge 
are  bemg  distributed  among  hospitals  for  the  sick  or  for  the 
insane,  schools  for  the  feeble-minded  or  the  deaf  and  blind 
children's  homes,  colonies  for  epilepUcs,  and  a  multitude  of 
variously  named  benevolent  institutions.   This  more  humane 
classification  is  still  in  progress  and  tends  further  to  weed  out 
the  almshouse  population.   More  adequate  legislation  govern- 
ing ahnshouses  and  better  methods  of  administration  have  also 
contnbuted  toward  a  diminution  of  the  ahnshouse  population 
Fmally,  recent  years  have  witnessed  an  extraordinary  develop- 
ment  of  rationally  organized  charity  work,  chiefly  of  a  private 
nature,  which  has  striven  with  teUing  effect  to  make  the  poor 
self-helping  and  to  distribute  destitute  children  among  families 
thus  saving  so  far  as  possible  the  dependents  from  institutional 
life.   In  this  connection,  it  is  worthy  of  note  that  in  states  with 
the  best-equipped  systems  of  organized  private  charity  the 
pauper  ratios  have  decreased,  notwiUistanding  tiie  fact  that  some 
of  these  states  contain  tiie  largest  urban  centers  in  the  country. 

Another  question  may  arise  in  studying  Table  I; 
Whether  the  basis  for  United  States  pensioners  in 
Massachusetts  holds  good  for  the  country  at  large. 
That  this  question  may  be  dismissed  without  mis- 
givings is  apparent  from  the  fact  that  the  total  num- 
ber  of  pensioners  in  the  United  States  on  account 
of  all  wars  is  951,687,  for  the  fiscal  year  ending 
June  30,  1908,  with  a  total  disbursement  for  that 
year  of  $153,095,086.1  It  may  be  presumed,  there- 
»  "  Ency.  Brit,,"  nth  ed..  Vol,  XXI,  page  12s. 


DEPENDENT  SUPERANNUATION  u 

fore,  in  the  absence  of  a  careful  compilation  by  states, 
that  the  total  number  of  pensioners  over  sixty-five 
years  of  age,  and  the  total  amount  disbursed  on  their 
behalf,  is  approximately  correct,  as  stated  in  the  table. 
Especially  is  this  true  in  view  of  the  fact  that  it  is 
altogether  unlikely  that  there  are  many  men  drawing 
pensions  for  injury  or  service  in  the  Civil  War  who 
are  now,  after  a  lapse  of  forty-six  years  from  the  close 
of  that  war,  less  than  sixty-five  years  of  age. 

The  report  of  the  Commissioner  of  Pensions  for 
the  fiscal  year  ending  June  30, 1910,  shows  (page  11) 
that  the  total  number  of  pensioners  at  that  time  was 
921,083  and  the  total  amount  paid  that  year  in  pen- 
sions, $159,947,056.08.    It  also  appears  from  that 
report  that  there  were,  at  that  time,  562,615  survivors 
of  the  Civil  War,  whose  average  age  is  about  seventy 
years.   The  estimate,  therefore,  in  Table  I,  that  the 
United  States  government  is  providing  by  pensions 
for  744,188  people  above  sixty-five  years  of  age,  at 
an  annual  cost  of  $114,590,068.24,  is  certainly  con- 
servative. 

Another  fact  with  reference  to  the  above  table 
should  be  mentioned,  viz.,  that  15,855  people  up- 
wards of  sixty-five  years  of  age  who  are  the  recipients 
of  state  and  military  aid  and  soldiers'  relief  under 
the  laws  of  Massachusetts  are  not  included ;  for  the 
reason  that,  while  a  few  other  states  report  similar 


12   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

laws,  the  larger  number  have  made  no  such  provision 
for  indigent  soldiers  above  sixty-five  years  of  age, 
independent  of  or  in  addition  to  grants  through  the 
Pension  Bureau  of  the  United  States.  Had  aU  other 
states  as  liberal  provisions  for  this  class  of  depend- 
ents as  are  on  the  statute  books  of  Massachusetts, 
the  number  of  aged  dependent  poor  maintained  by 
charity  throughout  the  United  States,  as  indicated 
by  the  above  table,  would  be  increased  by  420,892. 

Taking  all  these  facts  into  consideration,  the 
above  table  may  be  considered  as  fairly  representing 
the  magnitude  and  cost  of  the  dependent  population 
of  the  country,  sixty-five  years  old  and  over. 


TABLE  II 

Weekly  Incomes  and  Expenses  of  Non-Dependent  Aged  Poor 


Average 
Income 

FROM  ALL 

Sources 

Average 

EXPENDI- 

iure 

FOR  ALL 

Purposes 

PttCENTAGE  or  TBOSE  ReCEIV- 

mo  Imcome  prom  Special 

Sources 

From 
Savings 

From 
Relatives 

From 
Poisioat 

Individual  males  .  . 
Individual  females  . 

$7-32 
4-50 
11.70 

13-24 

$6.26 
4.28 
932 

1 2.00 

36.1 
440 

SS-3 

58.7 

36.1 

S7-0 
29.0 
12.4 

ISS 

9-4 
195 
32-3 

It  must  be  borne  in  mind,  however,  that,  as  ex- 
pressed before,  the  large  class  of  non-dependent  poor 
is  but  famtly  removed  from  the  class  of  dependent 
poor.   The  facts  as  gathered  by  the  Massachusetts 


DEPENDENT  SUPERANNUATION  13 

Commission  above  referred  to,  and  contained  in  tables 
in  the  published  report  on  pages  43  and  44,  may  be 
summarized  in  the  preceding  table,  showing  the  weekly 
incomes  and  expenses  of  non-dependent  aged  poor. 

From  the  above  table,  it  will  be  seen  that  the 
many  thousands  of  comparatively  well-to-do  aged 
people  may,  by  the  slightest  slip  of  luck  or  fortune, 
become  absolutely  dependent  on  charity.  With  the 
average  weekly  income  of  $7.32  for  males  and  $4.50 
for  females,  and  average  expenditure  respectively 
$6.26  and  $4.28,  and  with  such  a  large  proportion  of 
the  income  from  sources  other  than  that  of  weekly 
wages,  one  can  readily  appreciate  that  it  is  but  a 
step  from  poverty  to  pauperism  after  the  sixty-fifth 
birthday  is  passed.  The  Massachusetts  Commission 
has  emphasized  this  fact  further  in  pointing  out  (page 
55)  that  only  12.5  per  cent  of  the  inmates  of  the 
almsh.  .  es  in  that  state  are  able  to  work ;  and 
only  5.3  per  cent  of  those  maintained  In  benevolent 
homes  are  able-bodied.  Among  the  non-institutional 
poor,  the  percentage  of  able-bodied  receiving  public 
relief  is  but  X2.9,  and  of  those  receiving  private  relief 
9.8.  Among  the  non-dependent  poor,  46.6  per  cent 
are  not  able  to  work.  Should  their  income  from 
private  sources  be  curtailed  or  cut  off,  they  must 
necessarily  go  over  at  once  to  the  class  of  dependent 
poor.  That  this  income  may  easily  be  cut  off  is 


14   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

apparent  from  the  fact  that  among  the  institutional 
and  non-institutional  aged  poor  in  Massachusetts, 
only  7.7  per  cent  have  adult  children  or  relatives  able 
to  aid  them  financially.  Remove  such  aid  by  death, 
misfortune,  or  non-employment,  and  the  aged  rela- 
tive, who  has  been  de,)cndent  upon  it  to  keep  him 
from  the  poorliouse,  is  inevitably  and  irrevocably 
plunged  into  the  abyss  of  the  dependent  poor. 

From  all  these  considerations,  it  must  be  apparent 
that  the  estimate  in  Table  I  of  a  million  and  a  quarter 
dependent  poor,  ab.  .    sixty-rive  years  of  age,  in  this 
country,  is  not  extravagant.    Congressman  Berger  of 
Wisconsin,  in  a  speech  before  the  House  of  Repre- 
sentatives at  Washington,  August  7,  191 1,  estimates 
on  data  furnished  by  the  Census  Bureau,  that  the 
possible  pensioners  above  sixty  years  of  age  in  this 
country  number  2,675,000,*  which  is  a  further  indica- 
tion that  the  number  of  dependents  above  age  sixty- 
five  as  given  in  Table  I  is  conservative.   It  is  true 
that  this  condition  is  not  as  hopeless  or  as  startling 
as  that  in  Great  Britain.    Old  age  dependency  is 
very  much  more  marked  in  England  than  it  is  in  this 
country.    In  Massachusetts,  the  paupers  sixty-five 
years  old  and  over  are  only  31.7  per  thousand  of  the 
population  of  the  same  age;  in  the  United  Kingdom, 
the  number  is  172  to  the  thousand.   It  is  deplorable 
« Congrm!onal  Record,  Vol  47,  No.  101,  page  3913. 


DEPENDENT  SUPERANNUATION  15 

to  OUT  EngKsh  friends  that  667,000  people  in  Great 
Britain,  over  seventy  years  of  age,  report  their  indi- 
vidual annual  income  as  less  than  $160.  The  con- 
dition of  the  aped  poor  in  other  countries  of  Europe 
is  equally  or  more  distressing. 

The  pen  picture  which  Francis  Herbert  Stead, 
M.A.,  gives  of  the  aged  poor  in  England,  as  it  was 
revealed  to  him  when  he  look  up  his  residence  directly 
among  them,  is  just  as  true  to  nature  in  this  country 
as  in  England;  and,  therefore,  is  presented  here 
because  of  its  force  in  individualizing  the  facts  con- 
cerning the  army  of  a  million  and  a  quarter  aged 
dependents  in  this  country.  Mr.  Stead  draws  the 
picture  thus ;  — 

But  I  did  know  the  bitter  facts  of  many  an  aged  life.  I 
knew  men  who  had  served  the  same  firm  for  more  than  twenty 

years  turned  away  at  a  week's  notice,  because  they  were  "too 
old."  I  saw  the  effects  of  that  stunning  blow.  I  saw  the 
ahnost  frantic  search  for  another  job  that  could  never  be 
found.  I  saw  the  sickening  of  heart  that  sank  into  despair. 
Evciywhere  the  same  answer  was  given,  couched  in  differing 
phrases,  but  always  meaning,  "You  are  too  old  to  work." 

I  saw  what  came  of  them.  In  some  cases  ihey  went  to  live 
with  a  poor  son  or  daughter.  They  knew  they  were  a  heavy 
extra  charge  upon  the  meager  income  of  the  narrow  home. 
Yet  they  had  to  stay,  until  the  burden  could  be  no  longer 
borne,  or  unemployment  came  and  there  was  "nothing  coming 
in"  either  for  child  or  for  parent. 

I  saw  old  men  in  desperation  applying  for  charity.  I  knew 
the  galling  inquisition  iiey  went  through.   I  knew  the  pitiless 


l6  OLD  AGE  DEPENDENCY  IN  TlIE  UNITED  STATES 


exposure  to  prying  eyes  of  their  life's  nakedness.  And  I  saw 
them,  after  this  ordeal,  refused  the  help  they  sought  and  almos- 
thought  they  had  obtained  —  refused  because  of  some  long- 
gone  fault  in  early  life. 

I  saw  men  who  trembled  for  very  age  hawking  trifles  m  the 
streets,  and  tottering  on  through  mud  and  sleet  and  icy  wind. 
I  saw  men  slowly  wither  up,  body  and  soul,  under  the  blight- 
ing sense  that  th^  were  wanted  nowhere,  and  a  burden  every- 
where. 

When  he  is  forsaken. 
Withered  and  shaken. 
What  can  an  old  man  do  but  die? 

Only  those  who  have  seen  it  can  conceive  the  misery  of  the 
poor  old  fellow  who  finds  that  society  has  no  longer  any  use 
for  hun,  who  feels  he  is  done  with  and  done  for.  Manly  old 
men  come  to  me,  with  tears  running  down  their  cheeks,  im- 
ploring me  as  if  I  were  Almighty  God  to  have  pity  on  them 
and  get  them  work  —  "Anything,  oh,  anything,  no  matter 
what  it  is,  to  keep  me  from  the  workhouse ! " » 

While  it  may  be  some  consolation  to  v.ie  states- 
men and  sociologists  in  America  hat  the  condition  of 
the  aged  poor  on  this  side  of  the  Atlantic  is  not  as 
deplorable  as  on  the  other  side,  yet  the  fact  remains 
that  the  American  nation  is  face  to  face  with  a  stu- 
pendous problem :  Hundreds  of  thousands  of  working 
people  already  across  the  border  into  helpless  and 
hopeless  superannuation,  tens  and  hundreds  of  thou- 
sands more  now  pressing  the  border  line;  and  the 
great  mass  of  Ajierican  working  people  looking  down 
» "How  Old  Age  Pensfons  Be^n  to  Be,"  page  5. 


DEPENDENT  SUPEKANNUATION  17 

the  vista  of  the  years  to  possible  dependence  upon 
charity  during  their  last  few  years  on  the  earth; 
with  millions  of  money  being  spent  annually  for  the 
relief  of  this  condition  and  very  Httle  for  its  preven- 
tion. Certainly  the  old  age  dependency  problem  in 
the  United  States  is  worthy  of  the  most  serious 
thought  and  determined  action  of  the  entire  nation. 


9 


PART  II 

CAUSES  OF  OLD  AGE  DEPENDENCY 


PART  n 


Causes  of  Old  Age  Dependency 

The  first  problem  in  relation  to  old  age  dependency 
is  the  discovery  of  its  cause.   If  one  person  in  ninety- 
two  having  to  do  with  a  machine  becomes  disabled 
and  dependent  to  the  extent  that,  in  the  later  years 
of  his  life,  each  of  the  other  ninety-one  of  his  asso- 
ciates pays  directly  or  indirectly,  voluntarily  or  com- 
pulsorily,  two  dollars  per  year  for  his  support,  then 
certainly  it  is  wisdom  on  the  part  of  theso  ninety-one 
to  ascertain  what  is  wrong  with  the     achine;  es- 
pedalJy  if  there  is  a  strong  probability  that  many  of 
them  will,  in  time,  likewise  become  disabled  and 
dependent. 

Here  is  a  great  industrial  mechanism  engaging  the 
daily  activities  of  ninety-two  nulUons  of  people,  — 
at  tiie  forge,  loom,  spindles;  in  the  field,  shop,  fac- 
tory; along  tiie  lines  of  manufacture,  trade,  com- 
merce; upon  land  and  water,  — a  great  machine 
designed  for  the  general  welfare  and  growing  more 
and  more  intricate  and  involved  as  the  resources  of 
tiie  country  develop  and  tiie  population  increases,  — 


31 


22   OLD  AGE  DEPENDENCY  L\  THE  UNITED  STATES 


a  machine  at  which  each  individual  of  the  ninety- 
two  millit  IS  has  his  post,  designated  either  by  choice 
or  circumstance.  The  results  of  the  q>eration  of 
the  machine  are  that  many  are  prosperous,  happy, 
contented ;  some  are  restless,  moody,  impatient ; 
while  to  a  few  —  and  their  number  seems  increasing 
—  this  niaciiinc  is  a  verital  ic  Ju,i,'^ernaut,  alTording 
opportunities  of  amusement,  entertainment,  enjoy- 
ment fo  the  (jreat  mass.  l)u(  hurh'ni,' aside  as  disabled, 
distraught,  dependent  at  least  one  in  ninety-two  of 
its  operatives. 

What  is  this  defect  of  the  machine  and  can  it  be 
remedied?  There  are  those  who  claim  that  the 
machine  is  now  as  nearly  perfect  as  human  ingenuity 
or  experience  can  make  it ;  or  that,  in  the  process  of 
further  evolution  its  imperfections  will  naturally  be 
eliminated.  There  are  others  who  take  a  "bitter- 
sweet" view  of  the  great  industrial  machine,— 
"That  there  may  be  life,  something  must  die"; 
that  it  is  inevitable  that  prosperity  and  adversity, 
joy  and  sorrow,  life  and  leath,  must  coexist;  that  to 
elim.inate  the  shadows  and  have  only  sunshine  in  the 
'  industrial  world  is  to  anticipate  the  IVIillcnnium. 
This  has  been  lar<^ely  the  theory  of  poets,  novelists, 
preachers  and  lawmakers.  Upon  this  theory  social 
workers  and  charit\-  folk  have  gone  about  on  their  Good 
Samaritan  errands.    But  the  trend  of  thought  among 


CAUSE&  OF  OLD  AGE  DIPCNDENCY  33 

sdentific,  pracUcal  invesUgators  now  is  that  misery 
is  not  a  necessary  evil;  and,  whether  the  result  of 
disease  or  poverty,  can  and  should  be  removed. 

It  is  true  that  staUstics  relating  to  the  cause  of 
helplessness  in  old  age  must  deal  necessarily  with 
general  outward  circumstance  rather  than  with  in- 
dividual mind  and  heart  conditions.   Professor  Devine 
has  given  expression  to  this  thought  thus:  "Remorse 
oyer  some  past  misconduct,  the  total  faUure  of  some 
high  ambition,  disappointment  in  love,  the  loneliness 
which  comes  from  the  inability  to  make  friends,  the 
silent  anguish  of  a  parent's  broken  heart,  and  a  vast 
number  of  other  such  experiences  which  are  familiar 
enough,  do  not  readily  lend  themselves  to  social  in- 
vestigation or  to  conscious  remcilial  social  endeavor."  ' 
It  would  be  interesting,  but  manifestly  imixjssible. 
to  discover  the  psychological  cause  of  dependence  in 
old  age,  which,  after  all,  may  be  primary  in  a  ma- 
jority of  distances;  loss  of  home,  friends,  savings  or 
employment,  sickness,  accident,  or  other  misfortune 
being  given  &s  an  excuse  for  the  real  cause  of  de- 
pendency, —  loss  of  mental  grip  and  surrender  to 
mental  forebodings.    "The  pauper  is  the  victim  of 
povert>-  who  surrenders,  and  when  he  surrenders,  the 
capitulation  is  abject,  absolute,  and  unconditional; 
having  acquired  the  hated  badge,  he  is  content  to 
»  "Misery  and  Its  Causes,"  page  4. 


24   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

wear  it  for  life  and  to  bequeath  it  to  his  children." » 

However,  the  statistician  cannot  take  into  account 
other  than  incidentally  mental  attitudes.    He  is 
necessarily  and  always  exclusively  confined  to  . 
ternal  circumstances  and  conditions. 

I.  Misfortune 

There  are  indications  everywhere  that  the  eco- 
nomic world  now  recognizes  that  dependency  in  old  age 
is  a  misfortune,  as  Professor  Devine  so  well  puts  it :  — 

The  question  which  I  raise  is  whether  the  wretched  poor, 
the  poor  who  suffer  in  their  poverty,  are  poor  because  they 
are  shiftless,  because  they  are  undisciph'ned,  because  they 
drink,  because  they  steal,  because  they  have  superfluous  chil- 
dren, because  of  personal  depravity,  personal  inclination,  and 
natural  [)refcrcnce;  or  whether  they  are  shiftless  and  undis- 
ciplined and  drink  and  steal  and  arc  unable  to  care  for  their 
too  numerous  children  because  our  social  institutions  and 
ecoQomic  arrangements  are  at  fault.  I  hold  that  personal 
depravity  is  as  foreign  to  any  sound  theory  of  the  hardships 
of  our  modern  poor  as  witchcraft  or  demoniacal  possession; 
that  these  hardships  are  economic,  social,  transitional,  meas- 
urable, manageable.  Misery,  as  we  say  of  tuberculosis,  is 
commimicable,  curable,  and  preventable.* 

^  What,  then,  are  the  misfortunes  that  have  brought 
the  aged  to  helpleSvS  dependency?  In  Massachu- 
setts, it  appears  that  37.9  per  cent  of  14,988  aged 
poor  had  property  above  debts  at  some  time  in  their 

»  Frank  W.  Lewis,  "State  Insurance,"  page  i8. 
*  "Misery  and  Its  Causes,"  pages  11-12. 


CAUSES  OF  OLD  AGE  DEPENDENCY  25 

lives;  of  those  having  owned  property,  23.3  per  cent 
claimed  a  value  of  five  hundred  dollars  or  less;  22.8 
per  cent,  a  value  of  five  hundred  dollars  to  one  thou- 
sand dollars,  and  53.9  per  cent  owned  property  at 
some  time  in  their  lives  valued  at  over  one  thousand 
dollars.^  It  appears  from  the  same  report,  that  56.1 
per  cent  of  14,988  old  people  now  receiving  aid  in 
Massachusetts  have  lost  their  property.-  The  Massa- 
chusetts Commission  reports  that  60.1  per  cent  of 
the  old  age  dependent  pr<  ^jerty  losers  in  that  state 
attribute  their  loss  to  extra  expenses  on  account  of 
sickness  and  emergencies;  25.4  per  cent  to  business 
failures  and  bad  investments;  6.2  per  cent  to  in- 
temperance and  extravagance;  fraud,  5.1  per  cent; 
and  fire,  3.2  per  cent »  In  the  absence  of  reliable 
statistics  on  this  phase  of  the  question  generally, 
these  percentages  for  Massachusetts  must  be  accepted 
as  fairly  representative  of  the  unfortunate  old  age 
dependents  throughout  the  country  at  large;  es- 
pecially, in  view  of  the  fact  that  good  author" ties 
make  a  general  estimate  that  72  per  rent  of  existing 
pauperism  throughout  the  United  States  is  attrib- 
utable to  misfortune.'* 

^ "  Report  (.  f  Commission  on  Old       Pessioiu,  Annuities  and  In- 
surance," page  73. 
*Idem,  page  74. 

•  Idem,  pages  57-58. 

*  A.  G.  Warner,  "  Axnoican  Charities,"  page  46. 


26  OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

Frequently  the  loss  of  property  is  the  direct  result 
of  accident  or  illness.    It  must  be  borne  in  mind 
that  workingmen^  compensation  for  accidents  h  « 
but  recently  been  introduced  into  this  country  and  is 
not  yet  extensively  provided  for  by  law.  According 
to  the  mortaUty  statistics  for  1908.  published  by  the 
United  States  Census  Bureau,  there  were  19,970  fatal 
accidents  to  wage-earners  in  that  year.*   Mr.  F.  L. 
Hoffman  estimates  the  number  of  non-fatal  accidents 
during  the  same  year  at  2,000,000.'  However,  Mr. 
Seager '  estimates  that  there  are  not  less  than  30,000 
fatal  accidents  among  wage-earners  every  year  in  this 
country;  as  a  result  of  which,  20,000  families  are 
reduced  to  destitution:  and  that,  in  consequence  of 
these  accidents,  some  15,000  widows  and  45.000 
cliildren  are  forced  to  accustom  themselves  to  a 
hand-to-mouth  existence,  which  necessarily  crowds 
employments  where  competition  is  keenest  and  wages 
are  lowest. 

If,  instead  of  resulting  fatally,  the  accident  merely  incapaci- 
tates the  wage-earner  for  continuing  work  in  his  trade,  the 
consequences  are  almost  as  bad.  In  this  event,  he,  too,  may 
he  forced  to  seek  work  in  those  unskiUed  employments  where 
•earnings  are  lowest.  Some  wage-earners  meet  this  situation 
with  no  loss  in  independence  and  self-respect.     Many  more 

'  ScaRcr,  "Social  Insurance,"  page  26. 

'  Bulletin  of  the  United  Sutes  Bumu  of  Labor,  No.  78,  Septem- 
ber, 1908. 

•  "Social  Insurance,"  page  15. 


CAUSES  OF  OLD  AGE  DEPENDENCY  27 

sink  under  their  misfortunes  and  in  time  adopt  the  standards 
—  or  lack  of  standards  — of  the  casual  laborers  with  whom 
they  have  to  compete.  When  we  consider  the  large  number 
of  accidents  that  result  in  permanent  disabUity,  we  must  recog- 
nize that  the  annual  quota  that  they  contribute  to  the  army 
of  the  standardl.  ss  lowest  class  is  as  large,  if  not  larger,  than 
the  quota  tluc  to  fatal  accidents.  In  the  aggregate,  industrial 
accidents  in  the  United  States  cause  a  lowering  of  standards 
of  living  for  probably  not  less  than  100,000  persons  every  year.» 

In  a  "Report  on  National  Vitality:  Its  Wastes 
and  Conservation,"  which  Professor  Irving  Fisher 
prepared  in  1909  for  the  National  Conservation  Com- 
mission, he  estimates  that  the  average  nimiber  of 
persons  disabled  by  illness  for  any  one  day  in  the 
United  States  is  3,000,000;  and  that  1,000,000  of 
these  are  in  the  working  period  of  life.  From  this, 
Professor  Fisher  figures  out  that  $500,000,000  are  the 
minimum  loss  in  earnings  on  account  of  illness. 
That  this  is  not  far  from  correct  may  be  ascertained 
readily  from  the  fact  that  tlie  United  States  Bureau 
of  Labor  has  estimated  tliat  twenty-seven  dollars  per 
annum  is  the  amount  which  each  laborer  in  the 
United  States  must  pay  out  on  the  average  (or  medi- 
cme.  The  iS,ooo,ooo  of  wage-earners  in  the  United 
States,  therefore,  pay  annually  for  niedicine  alone, 
during  accident  and  illness,  $486,000,000.  This  does 
not  include  doctors'  fees ;  nor  does  it  include  bills  on 

*  "Social  Insurance,"  page  16. 


28   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

account  of  death  and  burial.  Professor  Fisher  esti- 
mates that  labor's  wages  each  year  in  the  United 
States  are  taxed  in  loss  of  earnings  and  expenses  on 
account  of  illness  and  death  fully  Si,ooo,ooo,cxx3. 
Other  auth  ities  place  this  cost  to  labor  at  not  less 
than  $3,000,000,000  annually.* 

How  quickly,  therefore,  before  this  avalanche  of 
misiortune  on  account  of  sickness  do  the  small  sav- 
ings of  the  average  wage-earner  disappear.  It  has 
been  ascertained  that,  in  a  typical  savings  bank  in 
Massachusetts,  the  average  deposit  of  wage-earners 
—  a  provision  for  the  proverbial  rainy  day  — was 
less  than  seventy-five  dollars.' 

It  would  be  important  to  discover  how  much  of 
the  accumulated  property,  personal  and  real,  of 
those  who  are  now  aged  dependents  has  disappeared 
because  of  the  misfortune  of  sickness  and  death  in 
the  family,  leaving  the  ashes  of  disappointment  and 
helpless  dependence. 

It  is  notable  that,  after  the  age  of  sixty  has  been 
reached,  the  transition  from  non-dependence  to  de- 
pendence is  an  easy  stage,  —  property  gone,  friends 
,  passed  away  or  removed,  relatives  become  few, 
ambition  collapsed,  only  a  few  short  years  left  to 
live,  with  death  a  final  and  welcome  end  to  it  all,  — 

*  "Social  Insurance,"  page  45. 

*  Massachusetts  Bureau  of  Labor  Statistics,  Third  Annual  Report, 
pages  304, 313, 318,  and  325 ;  also  Fourth  Annual  Report,  page  192. 


CAUSES  OP  OLD  AGE  DEPENDENCY  2g 

such  conclusions  inevitably  sweep  the  wage-earaer 
from  the  class  of  hopeful,  independent  citizens  into 
that  of  the  helpless  poor. 

Such  financial  misfortunes  are  usually  accom- 
panied with  dire  physical  disease.   Thus  the  United 
States  Census  Report  on  Paupers  in  Almshouses* 
shows  that  79  per  cent  of  the  total  population  cf  the 
country  in  almsliouses  is  physically  and  mentally 
defective.    If  may  be  remarked  that  this  is  a  much 
lower  percentage  than  that  shown  b>   the  Massa- 
chusetts Commission,-  viz.,  93.8  per  cent;  that  that 
report  also  shows  that  only  12.5  per  cent  of  the  alms- 
hou.-,e  population  in  Massachusetts  are  a}jle-l)odied.' 
The  wholly  incapacitated  of  the  dependent  poor  in 
Massachusetts  in  benevolent  homes  reaches  the 
higher  percentage  of  85.2 ;  those  on  account  of  sick- 
ness, 71.6  per  cent;  those  on  account  of  accident, 
13.4  per  cent.   The  Commission  makes  comment  on 
this  finding,  "The  well-known  fact  that  sickness  is 
productive  of  poverty  and  dependency  is  strongly 
emphasized  by  these  figures."* 

From  time  immemorial,  one  of  the  misfortunes 
most  feared  by  the  laboring  class  is  that  of  unem- 

» Page  35,  Table  36  on  page  182. 

'  Report  of  the  Commissioa  on  OW  Age  Pensions,  Annuities  and 

Insurance,"  page  55. 
'/rfew,  page  55- 
<  Idem,  pajje  5O. 


30   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ploymcnt.   "Why  stand  ye  here  all  the  day  idle?" 

~  "Because  no  man  hath  hired  us,"  presents  a 
picture  in  Bibh'cal  times  which  has  been  reproduced 
in  all  ages  and  countries  throughout  labor's  history. 
The  laborer  must  have  shelter,  food  and  clothes  for 
his  idle  days  as  well  as  for  other  days ;  l)ut  rarely  is 
the  rate  of  wages  fixed  so  as  to  cover  days  of  enforced 
rest  or  absolute  loss  of  emplo\-ment. 

The  Pennsylvania  Bureau  of  Industrial  Statistics 
reports  that  "in  forty-seven  industries  investigated, 
the  percentage  of  time  during  which  the  men  were 
out  of  work  varied  from  fifteen  in  1893,  to  three  in 
1898.   The  New  York  Bureau  of  Labor  Statistics 
exhibits  the  rate  of  unemployed  among  organized 
workmen  (where  it  is  usually  less  than  among  the 
unorganized),  from  1897  to  1901,  as  varying  from 
nine  per  cent  to  twenty-five  per  cent."  '    Mr.  Charles 
B.  Spahr  says  that  "it  is  a  prosperous  year  indeed 
when  the  ^.^-erage  wage-receiver  aggregates  forty-four 
full  weeks  of  employment."  ^    The  percentage  of  loss 
of  time  would  thus  be  fifteen.    Mr.  Levasseur  esti- 
mates that  this  percentage  is  about  ten  in  ordinary 
circumstances.'    Professor  Scott  Nearing '  is  inclined 

•  Ryan,  "A  Living  Wage,"  page  148. 

•"Present  Distribution  of  Wealth  in  the  United  States."  pages 

100- lOI.  ' 

'  "The  American  Workman,"  page  399. 

*  "Wages  in  the  United  States,"  page  213. 


CAUSES  OF  OLD  AGE  DEPENDENCY  3Z 


to  the  opinion  that  the  loss  in  wages  owing  to  non- 
employment  is  more  nearly  twenty  per  cent  per 
annum  than  ten,  although  absolute  data  are  not  yet 
available.  From  the  investigations  into  this  subject 
made  by  the  Census  Bureau  in  the  Twelfth  Census 
Report,  it  is  shown  that  28.3  per  cent  of  workers  in 
manufacturing  and  mercantile  industries  were  un- 
occupied for  some  part  of  the  year,  —  46.5  per  cent 
of  these  losint^  from  one  to  throe  months.  42.2  per 
cent  from  four  to  six  months,  and  11.3  per  cent  from 
seven  to  twehe  months.* 

Irregularity  of  employment  is,  of  course,  accounted 
for,  to  some  extent,  by  the  fact  that  a  large  number 
of  occupations  are  "seasonal."  The  Bureau  of 
Labor  finds  that,  in  the  building  and  stone  working 
trades  in  New  York  State,  35  per  cent  of  the  wage- 
earners  are  unemployed  in  January  to  only  10  per 
cent  in  September.  There  are  many  other  occupa- 
tions that  show  as  great  a  range  of  variation.  How- 
ever, of  100,000  members  of  trade  unions  in  New 
York  State,  there  is  a  variation  of  unemployment 
from  15  per  cent  in  midsummer  to  5  per  cent  in  the 
autumn  months.  The  proportion  of  unemployed 
varies  with  the  general  range  of  industrial  activity. 
For  instance,  diuing  the  depression  of  1907  and  1908, 

•Twelfth  Report  of  Census  Bureau  —  volume  on  "Occupations," 
page  23s. 


32   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

the  percentage  of  unemployment  in  the  winter 
months  was  thirty-fiv.  as  compared  with  twenty  for 
the  months  of  November,  1907,  and  April.  1909. 
The  New  York  State  Census  Report  for  1905  shows 
that  the  difference  between  the  maximum  and  mim'- 
mum  requirements  of  all  manufacturing  industries  was 
not  less  than  300,000.    On  the  basis  of  900,000  per- 
sons employed,  joo,ooo,  or  33J  per  cent,  were  either 
unemployed  for  some  time  during  the  year,  or  forced 
to  change  from  one  employment  to  another.  This  con- 
dition of  temporary  dependence  upon  charity  is  very 
clearly  brought  out  by  the  record  of  thJ  Chanty 
Organization  Society  in  New  York  City,  from  which 
it  appears  that,  in  1906-1907,  65  per  cent  of  the  new 
famines  who  appUed  for  aid  had  some  wage-earner  un- 
employed ;  and,  in  1907-1908,  this  was  true  of  72  per 
cent  of  such  families.^   Concerning  tWs  crush  of  unem- 
ployed and  its  inevitable  result  in  lowering  wages  and 
extending  dependence,  Professor  Devine  remarks :  2  - 

The  calm  acceptance  of  a  situation  in  which  surrounding 
every  industry  there  is  an  eager  and  perhaps  half-famished 
nng  of  unemploye.  whose  presence  undermines  the  natural 
.strength  of  the  employed  workingmen,  whose  lower  standards 
threaten  their  standard  of  living,  whose  necessities  may  be 
played  off  against  the  other;vise  successful  attempts  of  wage- 
earners  to  increase  their  wages  and  improve  their  condiUon  is 
nothing  else  than  callousness.  ' 

'  "Mf3er>'  and  Its  Causes,"  page  1T7.         *Ibid.,  page  120. 


CAUSES  OF  OLD  AGE  DEPENDENCY 


33 


Perhaps  the  latest  word  in  this  study  of  the  eflfect 
of  non-employment  on  the  wages  of  workingmen  in 
this  country  is  that  given  by  John  Mitchell  in  his 

discussion  on  "Modem  Labor  Problems,"  in  the 
Philadelphia  North  American,  issue  of  October  r,  191 1, 
from  which  the  following  quotation  is  pertinent  to  the 
consideration  of  this  phase  of  the  problem :  — 

But,  it  wQl  be  asked,  is  really  the  encompassing  direct  cause 
of  dependent  poverty  to-day  in  America  unemployment? 

Recent  reports  are:  The  cases  of  five  t.iousand  families  apply- 
ing to  the  Charity  Organization  Society  for  aid  being  duly 
recorded  with  reference  to  the  sources  of  deprivation,  ten 
specific  causes  were  set  down  as  those  to  which  disabflity  to 
make  a  living  were  attributable.  In  more  than  sixty-nine  per 
cent  a  factor  was  unemployment,  though,  naturally,  associated 
with  other  factors  —  chronic  disease,  physical  incapacity, 
widowhood,  etc.  Intemperance  was  a  concomitant  in  less 
than  1 7  per  cent  of  all  these  cases. 

In  4325  families  applying  to  the  United  Hebrew  Charities 
for  aid,  there  were  1348  cases  of  unemployment  on  part  of  the 
breadwinners.  Of  62,851  unoccupied  members  of  labor  unions 
in  the  state  of  New  York,  at  the  end  of  March,  1910,  42,010 
were  out  because  of  lack  of  employment.  The  state  commis- 
sion on  unemployment  reports  that  the  records  of  charitable 
organizations  show  that  a  large  proportion  of  cases  of  destitu- 
tion is  due  primarily  to  lack  of  work.  The  Bowery  Mission  in 
two  and  a  half  years  found  work  for  only  9000  out  of  about 
40,000  applicants ;  the  National  Emplo5Tnent  Exchange  in  1910 
for  only  4600  out  of  24,600  applicants ;  the  division  of  informa- 
tion, United  States  Bureau  of  Immigration,  only  3813  out  of 
24,000. 


34   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


There  may  have  been  a  time  when  Xew  'S'ork  statistics  for 
unemployment  were  not  accurately  suggi^tive  as  a  gauRc  for 
the  country  as  a  whole.  But  the  investigator,  as  a  preliminary 
step,  might  profitably  inquire  in  November  at  the  Atlanta 
convention  as  to  whether  the  delegates  can  give  evidence  that 
New  York  conditions  in  this  respect  arc  typical  or  not  for  the 
industrial  centers  in  general  of  the  United  States  to-day. 
WTiat  would  necessarily  be  the  re  ply  of  the  miners,  the  steel 
workers,  the  building  trades"  laliorers,  the  freight  handlers, 
the  railroad  maintenance  of  way  employees,  the  seamen,  the 
laborers  for  roadway  and  similar  contractors  ?  What  the  reply 
of  the  indoor  occupations  —  the  needle  workers,  the  mill  opera- 
tives, the  light  metal  shop  hands,  the  factory  workers  in  a 
score  of  national  industries? 

The  answer  is  to  be  found  in  the  long-contested  strikes  of 
the  last  few  years.  The  mere  mention  of  geographical  names 
calls  up  heart-rending  accounts  of  tlu  suderings  of  wage  ranu  rs 
who  have  had  their  bitter  choice  between  uncomplaining  in- 
sufficiency while  at  work  and  desperate  straits  while  on  strike  — 
Wistmoreland  county  and  Bethlehem,  Pa.;  Grand  Rapids, 
Michigan.  Every  year  New  York  and  Chicago  and  oth.r 
large  ciUes  show  the  possibilities  of  labor  disputes  involving 
men  and  women  by  the  tens  of  thousands.  With  the  succes- 
sive investigations  of  labor  conditions,  by  the  unions,  by  labor 
bureaus,  by  social  workers,  the  indi  trial  and  mining  centers 
of  the  country  arc  seen  to  present  the  same  general  features  of 
masses  of  immigrant  workmen,  employed  and  unemployed,  at 
times  weakening  trade  unions  through  competition,  at  times, 
*  whether  organized  or  unorganized,  breaking  out  in  strikes,  and 
astonishing  the  public  with  their  recklessness,  by  their  stub- 
bom  resistance,  or  their  patient,  dogged  sufiFering. 

That  this  army  of  unemployed  is  all  too  frequently 
increased  by  strikes  and  lockouts  and  is  growing 


CAUSES  OF  OLD  AGE  DEPENDENCY  35 

everlastingly  by  the  immigration  of  a  vast  horde 
annually,  —  unskillcrl.  casual   laborers.  -  is  signifi- 
cant, but  not  germane  to  the  pr.jp„siti,m  that  unem- 
ployment is  one  of  the  misfortunes  of  the  wag.  -earner 
in  our  country,  resulting  in  an  addition  of  dependency 
which,  even  though  temporary,  seriousl.  impairs  his 
opportunity  and  abiHty  to  provide  for  old  age.  Xor 
is  the  consideration  of  the  introduction  and  applica- 
tion of  improved  machinery,  whereby  thousands 
upon  thousands  of  more  or  less  skilled  workmen  are 
thrown  out  of  employment,  or  are  compelled  to 
change  occupation  with  decreasing  opportunities  for 
saving  against  the  demands  of  old  age,  particularly 
germane  to  the  question.    It  is  relevant  to  the  issue, 
however,  to  emphasize  that  sucl:  compulsory  change 
of  occupation  or  employment  as  age  advances  very 
seriously  augments  the  inability  of  wage-earners  to 
provide  for  old  age  necessities.   As  Professor  Devine 
so  well  expresses  it : '  — 

It  is  notorious  that  the  insatiable  factory  wears  01:^  its 
woiiers  with  great  rapidity.  As  it  scraps  machinery,  so  it 
scraps  human  beings.  The  young,  the  vigorous,  the  adapt- 
able, the  supple  of  limb,  the  alert  of  mind,  are  in  demand  In 
business  and  in  the  professions  maturity  of  judgment  and 
npentd  experience  offset,  to  some  extent,  the  disadvantages  of 
old  age  ;  but  in  the  factory  and  on  the  railway,  with  spade  and 
PICK,  at  the  spindle,  at  the  steel  converters,  there  are  no  offsets. 

>  "Misery  and  Its  Causes,"  page  125. 


36  OLD  AG£  DEPENDENCY  IN  THE  UNITED  STATES 

Mid'llf  .iRe  is  old  age,  and  the  worn-out  worker,  if  he  has  no 
I'hilclRn  and  if  he  has  no  savings,  becomet  an  item  in  the 
aggregate  of  the  unemployed. 

It  may  be  remarked,  in  passing,  that  there  is 
scarcely  a  railroad  of  any  considerable  importance  in 
the  United  St.  us  that  will  give  any  worker  employ- 
ment after  he  ha^  passed  his  furly-liflli  birtliday. 
There  are  many  industrial  i orporations  that  tix  the 
age  of  forty  as  the  maximum  at  which  a  new  man 
will  be  taken  on,  especially  in  connection  with  the 
operation  of  machinery. 

Non-employment,  or  loss  of  employment,  therefore, 
in  nearly  every  wage-earner's  career  stands  as  a 
specter  of  forbidding  mien,  with  gaimt  finger  pointing 
the  way  to  charity  and  old  age  dependency.  Some 
of  the  labor  organizations  have  tried  to  guard  against 
this  misfortune  by  providing  imemployment  bene- 
fits; but  how  sporadic  and  inadequate  the  provision 
is  may  be  seen  by  a  mere  glance  at  Table  III. 

It  appears  from  the  contemplation  of  this  phase 
of  the  prob'  -m  in  America  that  our  workingmen  are 
far  behind  their  brothers  in  Great  Britain  in  pro- 
visions for  benefits  against  unemployment.  In  that 
country,  according  to  a  report  of  the  Bo  rd  of  Trade 
for  1904,  eighty-one  of  the  one  hundred  principal 
unions,  representing  84  per  cent  of  the  membership 
of  these  umona,  paid  out  in  unempioyiueaL  bcuelltii 


CAU818  OF  OLD  AOE  DEPSNDtNCY 


37 


tabu;  III 

Labor  Unions  paying  Unemployment  Benefits 


Nam*  or  Local  Union 


Bakers  

Bakera  

Brewery  workmen    .    .    .  . 

CiirpcntiTs  and  Joiners,  Amal- 
gamated Society  of   .    .  . 

Cigar  Makers'  International 
Union   

I '» l^ographers  

'  tphers  

Liwj.  aphers  

Spinners  

Spinners  

Textile  workers  (weavers)  .  . 

Typographical  Union    .    .  . 


Ye\u 

Vmus 

UH) 

—  

NlTUBCR 

or 

1*1  KU- 

liilHs 

Y  K  \I 

1 NSTI- 
riTED 

! 

Wr.FKLY 
B».Nt. 
FITS 

1 

Total 
Amount 
Paid 

i8<ji 

1221 

i8gi 

$  ^.oo 

*o  J  /  7 

IQ04 

.?So 

308 

1886 

240 

1891 

J.OO 

198 

3  S0  ' 

i860 

1 

i860 

2.10  * 

• 

1864 

t 

i88g 

3.00  " 

23.911 

1893 

144 

1899 

3  to  9 

1 

1881 

64 

1897 

10.00 

80.00 

igo4 

J  90s 

6-4-3 

> 

1858 

7 

1887 

> 

t 

1878 

2 

1892 

1 

t 

i88g 

1  1 

1889 

1 

1 

1852 

>  1 

i 

1892 

1 

t 

over  $3,000,000,  or  nearly  one-third  of  the  total  of 
$10,000,000  expended  by  the  unions  in  that  year. 
TTiat  this  form  of  benefit  is  approved  by  trade-union 
sentiment  is  apparent  from  the  fact  that  the  mem- 
bership of  such  unions  as  provide  unemployment 

'  Not  reported  for  United  States. 

-  \i)t  rejiortcd. 

'  For  first  twelve  weeks. 

*  For  sectuid  twelve  weeks.  Total  benefit  in  one  year  limited  to 
$67.20. 

•  Total  not  given.  Seventy-seven  members  reported  as  receiving 
benefits  in  United  States  during  one  year. 

'  Not  to  exceed  $54  in  any  one  year. 


38   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


benefits  is  growing  more  rapidly  than  that  of  unioi^ 
not  making  such  provision.^ 

2.  Low  Wages 

To  those  who  have  given  thought  to  the  wage 
problem  in  America,  it  seems  remarkable  that  there 
have  ever  been  any  considerable  accumulations  to 
the  credit  of  wage-earners  to  be  swept  away  by  mis- 
fortune as  old  age  comes  on.  Labor  has  been  a 
commodity  bought  in  the  open  market  at  the 
lowest  competitive  price.  Mr.  Lewis  has  well  stated 
this.' 

It  happens,  as  though  through  some  inadvertence,  that  in 
making  a  contract  of  the  greatest  possible  moment,  both  parties 

seem  to  ignore  absolutely  certain  very  important  elements; 
the  contract  is  made  as  though  sickness,  accidents,  invalidity 
and  old  age  had  been  permanently  banished  from  the  earth. 
The  daily  wage  is  sufficient  only  for  daily  necessities;  a  man 
entitled  to  support  for  a  lifetime  unwittingly  consents  to  a 
wage  based  upon  a  portion  of  that  lifetime ;  for  the  competi- 
tion in  the  field  of  labor  is  among  the  strong,  the  able-bodied, 
the  efficient;  the  sick,  the  mauned,  the  superannuated,  are 
necessarily  excluded. 

It  is  a  well-known  maxim  in  economics,  amounting 
to  a  right,  natural,  political,  ethical,  and  universally 
recognized  in  theory,  that  every  man  is  entitled 
to  a  living  wage  for  his  labor.   It  is  unnecessar>-  to 

•  "Social  Insurance,"  pages  io8  and  rog. 
'  "State  Insurance,"  pajje  7, 


CAUSES  OF  OLD  AGE  DEPENDENCY  39 

quote  authorities  on  this  principle.  They  are  well- 
nigh  universal.  Only  occasionally  is  there  a  Mal- 
thusian  forecast  that  no  cover  shall  be  laid  for  the 
superfluous  man  at  Nature's  mighty  feast  and  that 
She  should  intimate  to  him,  on  the  Osier  theory, 
that,  after  having  passed  sixty-five,  he  is  an  encum- 
brance and  a  parasite.  It  is  a  principle  of  the  moral 
law,  finding  expression  in  the  statutory  provisions  of 
all  civilized  men,  that  the  product  of  the  labor  of  a 
given  generation  must  support  ail  during  that  genera- 
tion.' 

The  best  authorities  agree  that  six  hundred  dollars 
per  annum  is  the  minimum  wage  for  a  family  of  five 
or  six  in  the  United  States  in  industries  outside  of 
agriculture.'  That  is  to  say  that  the  necessities  of 
the  average  family  for  shelter,  food  and  clothing  can- 
not be  provided  for  on  less  than  six  hundred  dollars 
per  year. 

Table  IV,  "Laborers'  Hours  and  Wages  by  Occupa- 
tions," made  up  from  the  Nineteenth  Annual  Report 
of  the  Commissioner  of  Labor,  "Wages  and  Hours  of 
Labor,"  shows  the  average  hours  per  week  of  laborers 
in  given  occupations  and  the  average  wages  per  hour, 
week  and  year. 

«  F.  A.  Walker,  "The  Wage  Question,"  page  34. 
'J.  A.  Ryan,  "A  Living  Wage,"  page  150;  E.  T.  Devine,  "Prin- 
dples  of  Relief,"  page  35 ;  nc. 


40  OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


TABLE  IV 

Laborers'  Hours  and  Wages  by  OccupAnoNS  (Males) 


Class 


Brickmaking  

Building  trades  .  .  .  , 
Cars,  steam  railroad  .    .  , 

Flour  

Foundry  and  machine  shop 

Gas  

Glass  

Liquors,  distilled  .... 

Lumber  

Marble  and  stone  work  .  . 

Oil  

Paper  and  wood  pulp    .  . 

Planing  mill  

Rope  and  twine  .... 

Shipbuilding  

Slaughtering  and  meat  packing 

Soap  

Street  and  sewers,  contract  \' 
Streets,  etc.,  municipal  work 

Sugar  refining  

Tin  plate  


rk 


Aver- 
age 

Average  Wages 

Hours 

PEK 

Week 

Hour 

Week 

Year 

Ox. 15 

$.1365 

$8.35 

$434.20 

56.39 

•1675 

9-45 

491.14 

59-59 

.1362 

8.12 

412.24 

60.21 

.1784 

10.74 

551.48 

57-11 

•1585 

9  05 

490.60 

60.00 

•1544 

9.26 

481.52 

60.00 

.1566 

9.40 

488.80 

62.57 

.1500 

9.39 

488.28 

61.52 

•1444 

8.88 

461.70 

56.47 

•I7.S2 

9.89 

514.28 

60.00 

.1600 

9.60 

499.20 

63.20 

•1595 

10.08 

524.16 

5956 

.1250 

7.4s 

386.40 

60.00 

•1433 

8.60 

447.20 

57.48 

•185s 

10.66 

554.32 

60.00 

.1746 

10.48 

544-06 

60.00 

■1751 

10.50 

546.00 

55-85 

.11526 

10.76 

559-52 

50-50 

.2027 

10.24 

532.48 

69.40 

•1551 

10.76 

559  52 

56.79 

•1536 

8.73 

453.96 

It  will  be  noted  that  of  the  twenty-one  classes  of 
■  laborers  thus  tabulated,  not  one  showed  wages  in 
the  year  1903  equal  to  the  minimum  standard  of 
$600. 

Professor  Ryan  '  has  made  a  caieful  investigation 

*  "A  Living  Wage  "  pages  155-156. 


CAUSES  OF  OLD  AGE  DEPENDENCY  4I 

into  the  problem  of  "underpaid  laborers,"  —  that  is, 
adult  male  workers  whose  remuneration  is  less  than 
$600  per  year.  He  finds  that  of  757,856  males 
sixteen  years  old  and  over,  employed  in  44,225  estab- 
lishments in  one  himdred  and  sixty-five  cities,  there 
are  407,693  who  received  less  than  $12  per  week; 
that  is  to  say,  that  48  per  cent  of  the  male  adu'i^ 
failed  to  get  a  living  wage.  Excluding  from  these 
the  company  officers  and  firm  members  and  thereby 
confining  the  investigation  to  employees  or  wage- 
earners  he  concludes  that  51  per  cent  of  all  of  these 
received  less  than  $12  per  week. 

He  also  states  that  84  per  cent  of  17,650  employees 
in  typical  establishments  in  the  iron  and  steel  indus- 
tries received,  in  1891,  less  than  $2.01  per  day;  and 
concludes  that  81  per  cent  of  the  iron  and  steel 
workers,  at  that  time,  were  receiving  less  than  a 
living  wage.  He  also  finds  that  85  per  cent  of 
adult  males  mployed  on  the  railways  in  1889,  num- 
bering 224,570,  received  less  than  $2.01  per  day; 
and  that  66  per  cent  of  employees  in  textile,  wood- 
working and  metal-working  estabUshments,  in  1890, 
numbering  105,106  males  sixteen  years  of  age  and 
over,  received  less  than  $600  a  year. 

Of  the  decade  from  iSyo  to  1900,  the  report  on 
"Manufactures"  of  the  Twelfth  Census  says:  "It 
was  a  time  of  special  activity  and  productivity  of 


42  OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

manufactures";  "The  volume  of  industry  had 
nearly  reached  its  high-water  mark";  "There  has 
been  no  decade  in  which  business  conditions  were  so 
nearly  alike  at  its  beginning  and  at  its  end."  The 
monthly  bulletins  of  the  Bureau  of  Labor  showed 
that  in  1889,  1890  and  1891,  wages  were  generally 
higher  than  at  any  time  during  the  decade  preceding. 

Professor  Ryan,  however,  finds  that  of  160,267 
males  sixteen  years  old  and  over  in  typical  manufac- 
turing estabUshments,  64  per  cent  received  less  than 
a  living  wage  m  1900.    He  also  calls  attention  to 
the  Thirteenth  Annual  Report  of  the  Interstate 
Commerce  Commission  on  the  Statistics  of  Railways 
showing  that,  in  1900,  of  the  1,008,068  persons  em- 
ployed,  exclusive  of  officers,  82  per  cent  received  less 
than  S2.05  per  day;  and  that  the  Sixteenth  Annual 
Report  of  the  Commission,  in  1903,  shows  that  72 
per  cent  of  1.302,494  employees  received  less  than  a 
living  wage.    Professor   Ryan   has   constructed  a 
table  showing  the  mimbcx  of  employees  in  ^•arious 
occupations,  ranging  from  17,650  in  one  occupation 
to  2,125,717  in  another  occupation,  and  covering  the 
years  from  1889  to  1903,  in  which  the  percentage  of 
underpaid  males  runs  from  51  to  85.    From  all  of 
which  careful  investigation,  the  professor  reaches  the 
conclusion  that  at  least  60  per  cent  of  the  adult  male 
wage-earners  in  the  United  States  receive  less  than 


CAUSES  OF  OLD  AGE  DEPENDENCY  43 

$600  annuaUy;  that  is  to  say,  more  than  io,ocx5,ooo 
of  the  18,000,000  of  wage-earaers  in  this  country  re- 
ceive, on  the  average,  less  than  $600  per  year. 

It  cannot  be  denied  that  the  trend  of  wages  has 
been  to  a  generally  higher  level  in  the  past  few  years. 
The  Commissioner  of  Labor,  in  his  report  for  1904,* 
concludes  from  the  very  careful  investigaUons  made 
under  his  direction  that  the  average  wage  per  hour 
in  1903  was  16.3  per  cent  higher  than  the  average 
wage  per  hour  during  the  ten-year  period  1890  to 
1899.    It  is  generally  conceded,  however,  by  statis- 
ticians that  the  increase  of  wages  from  1903  to  191 1 
is  by  no  means  equal  to  that  reported  by  the  Bureau 
of  Labor  for  1903.    In  fact,  it  is  apparent  from  the 
most  careful  investigations  reported  that  wages 
generally  in  the  first  decade  of  the  twentieth  century 
are,  on  the  average,  not  more  than  15  per  cent  higher 
than  during  the  last  decade  of  the  nineteenth  cen- 
tury.  There  can  be  no  question  that  the  increase  in 
wages  has  not  kef)t  pace  with  the  increase  in  cost  of 
living.    The  Civil  Service  Association  of  Ottawa, 
Canada,  made  a  careful  investigation  into  the  rise 
of  commodities  during  the  ten  years  from  189S  to 
1907;   and  reports  that  the  cost  of  living  had  in- 
creased 34  per  cent  during  that  decade.^ 

*  "Wages  and  Hours  of  Labor,"  page  21. 

«  Tke  Labor  Gazette  (Dominion  of  Canada),  Vol.  8,  page  812. 


^4   '^i-D  DEPENDENCY  IN  THE  UNITED  STATES 

TAHL1-;  V 

AvERAGii  Per  Cents  of  Increase  in  Cost  of  Living  shown  by 
Wholesaue  Puces  in  Canada  in  1909 


Group 

Cosi- 

PAREO 
WITH 

iSgo 

Com- 

PARED 
WITH 

Dkcade 
i8qo- 

1899 

t 

CoMPAEED 
WITH  THE  Low 
YBiUl 

28.4 



49.9 

85.9. 

.1897 

33-6 

48.6 

80.3. 

.  1896 

29.7 

33-6 

48.2. 

.1897 

Fish  

29.7 

34-0 

47.9. 

.1892 

ii.8» 

7.6 

25.0. 

.1897 

2.8  > 

8.3 

IS-?- 

.1895 

7-3 

14.2 

34-2. 

.1902 

10.7 

29.8 

43.5. 

.  1898 

(c)  Silks  

27.1 » 

6.8' 

5.9. 

.  1901 

3.2' 

4.0' 

22.6. 

.1895 

5-2 

12.5 

2S.7. 

.1898 

(/)  Oilcloths  

27.6 ' 

4.6' 

17.6. 

.T899 

Hides,  leathers,  and  boots  and  shoes  . 

34-5 

35.4 

4S-9. 

.1896 

14.0 ' 

14.9. 

■1S97 

3-4' 

3.8 

II. 0. 

.1898 

Building  materials : 

49.3 

54-6 

70.2. 

.1898 

(6)  Miscellaneous  building  materials 

234 

35-2 

41.5. 

.1897 

(e)  Paints,  oil,  and  glass  .... 

11.2  ' 

5.7 

20.9. 

.1898 

lO.I 

10.4 

13.2. 

.1896 

6.3' 

3-9 

11.3. 

.1899 

Miscellaneous : 

(a)  Furs  

162.6 

1.7.2 

182.2. 

.189s 

(b)  Liquors  and  tobacco  .... 

23.8 

17-5 

23.8. 

.  1890 

8-5 

21.0 

33.3. 

.1897 

All  

9.8 

21.2 

31-4  • 

.1897 

*  Decrease. 


CAUSES  OP  OLD  AGE  DEPENDENCY  45 

Table  V,  reproduced  from  the  Qtmrterly  Publica- 
tions of  the  American  Statistical  Association,*  brings 
this  study  of  increase  in  prices  practically  down  to 
date,  the  investigation  having  covered  two  hundred 
and  tliirty  commodities  and  having  been  conducted 
by  R.  H.  Coats,  B.A.,  Associate  Editor  of  the  Labor 
Gazette,  under  the  authority  of  the  Canadian  Gov- 
ernment ;  and  is  of  special  importance  in  view  of  the 
comment  made  by  Allyn  A.  Young  to  the  effect  that, 
"Since  1899,  the  movement  of  prices  in  Canada  has 
been  about  midway  between  the  movement  of  prices 
in  England  and  in  the  United  States." 

It  is  agreed  by  statisticians  who  have  studied  the 
rise  in  commodity  prices  in  Canada  that  the  relative 
prices  did  not  fall  there  on  the  average  so  low  in  1897 
nor  rise  so  high  in  1907  as  in  the  United  States.  Con- 
sequently, it  may  be  accepted  as  an  incontrovertible 
conclusion  that  the  relative  average  rise  in  prices  of 
commodities  in  the  United  States,  during  the  first 
decade  of  the  twentieth  century,  is  for  the  generality 
of  commodities  not  less  than  25  per  cent. 

It  is  agreed  that,  as  heretofore  stated,  a  living  wage 
was  $600  per  year  for  the  last  decade  of  the  nine- 
teenth century ;  that  is  to  say,  $600  of  money  could 
be  exchanged  for  $600  worth  of  the  necessaries  of  life 
in  that  decade.  If  it  is  deemed,  —  and  the  admission 
"Vol.  XII,  page  384. 


46   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

seems  inevitable  from  the  above  presentation  of  facts, 
—  that  the  price  of  commodities  has  increased  in  this 

country  at  least  25  per  cent  on  the  whole  in  the  first 
decade  of  the  twentieth  century,  and  the  increase  in 
labor's  wages  has  been  not  more  than  15  per  cent, 
then  it  must  be  acknowledged  that  tlie  increase  in 
wages  has  not  kept  pace  with  the  increase  in  the 
cost  of  living.    Or,  stated  in  another  way:  if  S600 
worth  of  labor  was  equivalent  to  S600  worth  of  the 
necessaries  of  life  from  1890  to  1899,  then  the  labor- 
ing man,  in  the  first  decade  of  the  twentieth  century, 
has  been  trying  to  make  $690  cover  $750  worth  of 
the  necessaries  of  life.   This  conclusion  confirms  the 
estimate  made  by  Mr.  Robert  Hunter*  that,  "Not 
less  than  10,000,000  persons  in  the  United  States  are 
in  poverty";  that  is,  "They  may  be  able  to  get  a 
bare  subsistence  but  they  are  not  able  to  obtain 
those  necessities  which  will  permit  them  to  maintain 
a  state  of  physical  efficiency."    Mr.  Hunter  goes  on 
to  explain  "physical  efficiency":  "No  one  will  fail 
to  rcali/e  how  low  such  a  standard  is.    It  does  not 
necessarily  include  any  of  the  intellectual,  aesthetic  or 
"  social  necessities ;   it  is  a  purely  physical  standard 
dividing  those  who  are  in  po\erty  from  those  who 
may  be  said  to  be  out  of  it." ' 
Professor  Scott  Nearing  of  the  University  of  Penn- 

•  "pQw^ily,  ji^igts  00  and  5.  -Ibid.,  page  7, 


CAUSES  OF  OLD  AGE  DEPENDENCY  47 

sylvania  presents  this  study  of  wages  down  to  date 
in  his  new  book,  "Wages  in  the  United  States,  1908 
to  1910,"  in  which  he  concludes :  *  — 

There  is  little  variation  in  the  average  wages  from  state 
to  state  or  from  industry  to  industry  when  the  various  methods 

of  compiling  the  state  data  arc  taken  into  account.  Average 
wages  range  in  the  leading  industries  from  four  hundred  to 
six  hundred  dollars,  seldom  rising  to  the  latter  figures  except 
in  industries  like  petroleum  and  malt  liquors,  for  which  con- 
siderable skill  is  a  prerequisite  to  employment  and  in  which 
males  only  are  employed.    There  is  a  wide  variation  between 
the  average  in  these  industries  and  in  industries  like  con- 
fectionery and  paper  box  manufacturing,  which  employ  a 
majority  of  women  and  in  which  the  average  annual  earnings 
fall  below  four  hundred  dollars.    In  view  of  all  the  evidence, 
it  is  fair  to  say  that  the  adult  male  wage-workers  in  the  indus- 
tries of  that  section  of  the  United  Sutes  lying  east  of  the 
Rockies  and  north  of  the  Mason  and  Dixon  Line  receive  a 
total  average  annual  wag*^  of  about  six  hundred  dollars;  that 
this  falls  to  five  hundred  dollars  in  some  of  the  industries  em- 
ploying the  largest  number  of  persons,  but  rising  to  seven  hun- 
dred dollars  or  even  to  seven  hundred  and  fifty  dollars  in  a 
few  highly  skilled  industries.    That  the  average  annual  earn- 
ings of  adult  females  in  the  same  area  is  about  three  hundred 
and  fifty  dollars,  with  a  very  slight  range  in  the  industries 
employing  large  numbers  of  adult  females. 

Professor  Nearing  summarizes  his  studies  into  this 
problem,  thus :  *  — 

Here  then  in  b-ief  is  an  answer  to  that  vital  question, 
"What  arc  wages?"   For  the  available  sources  of  statistics 
'  "  Wages  in  the  United  States,",pagc  207.      « Idem,  page  214. 


48  OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

and  by  inference  for  neighboring  localities,  the  annual  earnings 
(unem{)l()yment  of  twenty  per  cent  deducted)  for  adult  males  and 
females  employed  east  of  the  Rockies  and  north  of  the  Mason 
and  Dixon  Line,  are  distributed  over  the  wage-scale  thus :  — 


Anmuai.  Eamoinw 

AiXTLT  Maus 

Adult  Femalu 

i 

Under  $525  

i 

Under  $500  

Under  $600  

I 

Under  $800  

A 

Three-fourths  of  the  adult  males  and  nineteen-twentieths  of  the 
adult  females  actually  earn  less  than  six  hundred  dollars  a  year. 

The  summaries  given  to  the  n-i^wspapers  by  the 
Census  Bureau  relative  to  compensation  of  workers 
in  various  classes  of  InHustry,  as  ascertained  by  the 
1910  census,  throw  more  light  on  the  subject  of  the  av- 
erage pay  of  employees  in  the  United  States.  The  sum- 
mary of  occupations,  nimiber  of  workers  and  amounts 
paid,  together  with  the  earnings  for  distribution  to  the 
investors,  b  given  in  the  table  on  the  oppodte  page. 

From  the  following  table,  it  appears  that  the  average 
amount  received  by  more  than  35,000,000  employees 
in  1910  was  only  I433,  Doubtless  the  average 
amount  is  so  low  because  of  the  large  number  of 
employees  in  agricultural  pursuits  whose  wages  in- 
clude "  board  and  keep."  If  the  other  principal  Imes 
of  industry,  viz.,  manufactures,  railroads,  mining,  and 


CAUSES  or  OLD  AGE  DEPENDENCY 


49 


bmomy 



No.  Woucut 
Emmotkd 

Waoes  ako 

SAuuim 

Manufactures  , 

7.405,313 

.    .  1 
•4,365.613.000 

Railroads    .   .  . 

1,662,550 

1,170432400 

Mining  .... 

851.438 

574,720,650 

Mercantilcs .    .  . 

2,072,112 

1,191,464,400 

Banking  .... 

358,808 

430,569,600 

Agriculture  ... 

12,561,936 

»-30o,993,o68 

Other  occupations 

10,558,265 

5,^20,848,600 

Totals  .    .   .  j 

35470422  1 

1 

*i  5,363,641, 778 

EAtMimM  KM 

DisniBimoN 

$2,219,472,000 
744,775,000 
338,626,296 
931,366,393 
215,385,377 

34»3S5r4SO 

3,627,199,400 

*i  0497,5 1 9,81 5 


mercantiles,  are  considered  in  a  class  by  thtmselves, 
it  is  found  that  the  11,991,413  employees  in  these 
classes  received  $7,302,230,450  per  year.  From  this 
it  is  evident  that  the  average  compensation  for  all 
workers  in  these  four  industries  is  a  Kttle  less  than 
$609  per  year.  It  must  be  borne  in  mind,  however, 
that  the  "compensation  "  column  includes  wages  and 
salaries.  If  the  salaries  paid  officers  and  overseers 
could  be  elimmated,  it  would  be  found  that  the  average 
remuneration  for  all  wage-earners  in  the  four  principal 
or  jr  -itions  named  is  considerably  under  $600  per  year. 
So  much  for  the  present  conrlition  of  the  wage- 
earners  in  this  country.  The  forecast  of  their  future 
is  thus  summed  up  by  Professor  Ryan :  *  — 

As  lu  the  prospects  of  the  underpaid,  wag.  s  have  increased 
less  rapidly  during  the  last  quarter  of  a  century  —  the  period 
of  our  greatest  industrial  improvearaits  —  thui  during  the 
« "A  Living  Wage,"  page  176. 


$0  OLD  A0£  DEPENDENCY  IN  THE  UNITED  SiitTES 

previous  thirty  \,  ,irs  Whenct  the  inft-  •  ^,  n- ,  valid, 
that  side  by  -  !.  w'r  pr.ign-        pr       -iuu    1'  r  a 

existed  forces  \\i,.c]i  have  ijrcvcateii  the  1  ,rcr  iri».  iam 
teg  his  fuU  share  of  the  results  of  that  progress.  Thr,  .  oi  tJi. 
forces,  namely,  n  :)<iH  ,  .  ombinations.  rapid  disp  .^emenc 
of  labor  !"  nu  r-.  .1  lxussi.x-  riul!'  ,iratio:  of  t'c 
instruments  of  prmlm  .=  v\  !1  in  a'.  •  •■•h:.' .lUty  be  v.'th  ,;s 
for  many  years  yet,  int  .  ,ir -4  the  rat;  ■>!  unen  <!'iyme  ..J 
restricting'  <'  n-.,var(i  m(  verun-  of  vi^g  '  ,  thi  Is 
the  pooro   :^.iiu.  Ix-ing  tlie    ,11         eitl  t  ^ 

tion  or  to  1  ilize  tl-  [w^-tbilities  ri  v.  in'  ,  inerau  1, 
will  naturaily  be  the  greatest  sufferers 

Now  it  must  be  borne  in  nv'\d   '      ti  Cer 


in 


•  iUJj 


na 
ns 


Bureau  reports  *  that  47.8  per  cei 
in  almshouses  in  the  United  St     .  coi-  om 
laboring  and  servant  c lasst  . ;    2^  7  pi  u 
those  engaged    :i  agncultu.      tran^  ^ -rtati^n, 
ofhtT  outdoor  pursuit>.  and  i<    »cr      ;  r-om  p 
ci'iiagcd  in  manufacturintr  and  n  lI.      ;i|  kh  - 
t  (j.se  three  c'  lsses  of    <  cup.     hi    furnishir  ,er 
cent  of  :dl  the  puupcr       th    L'niit-d  Stat* 

It  U  appa--  r     v   •'■■.it  tcr     nd  .,f 

thous..!  (Is  ui  .  \s  ■  ,1  in  i  ,j,  ^ 
ha\c  inwi\ ifhui     itiv  ;       (  '■  than 

living  wage;       !    aa  ^.  ,t  -^cs 

who  survive  th     ici>situ  l-t'  .  -^^ist. 

cnte  iontil  old  ;      is  rcai  ii     rt  si  heir 

places  in  the  grt     army  of  tl.e  u^cu  dep^  poor. 

'  "  P..    irs  in  Aiu.  ;ousc5,'"  page  j.^. 


PART  m 
EFi^RTS  AT  RELIEF 


PART  III 

Efforts  at  Relief 

"The  poor  always  ye  have  with  you."  Ahnost 
universal  is  the  instinct  to  reUeve  their  distress  and 
ameliorate  their  condition.   Charity  is  history-long 
*  and  world-wide.    Its  organization  is  of  slow  develop- 
ment and  its  systematic,  scientific  application  is  rare. 
Out  of  the  instinct  of  charity  in  the  individual  human 
heart  were  developed  the  so-called  burial  societies  in 
China;   the  Eranoi  among  the  Greeks;   the  guilds 
among  the  Teutons  in  medieval  times;  and  various 
fraternal  and  social  organizations  of  the  nineteenth 
century.    All  philosophies  and  religions  inculcate  the 
duty  of  caring  for  the  poor  and  relieving  the  distressed. 
Only  upon  one  island,  in  a  distant  section  of  the 
ocean,  was  there  found  one  barbarian  clan  whose 
method  of  dealing  with  the  aged  poor  seems  con- 
trary to  the  universal  instinct.   Upon  this  island, 
when  one  became  helplessly  dependent,  a  councU  of 
his  fellows  was  caUed;  and,  if  their  decision  was  that 
he  had  passed  the  period  of  usefulness  in  life,  a  great 
feast  was  made  on  his  behalf,  at  which  he  bade  fare- 
well  to  his  friends  and  went  submissively  to  the  death 
decreed  for  him. 

53 


54   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

It  may  be  questioned  whether  a  lingering,  suffering 

existence  in  want  in  old  age  is  less  pitiable  than  the 
quick  relief  furnished  by  these  barbarians;  and  yet, 
to  the  superannuated  soldier  in  the  industrial  army 
who  began  life  with  a  high  spirit,  noble  ambitions,  and 
strong  determination,  and  who  has  faithfully  and 
loyally  done  his  duty  and  served  his  generation  to 
the  best  of  his  ability  ind  opportunity,  but  who  is 
reduced  by  accumulated  misfortune  to  a  condition  of 
want  and  dependence,  the  doling  out  of  charity  by 
the  operation  of  poor  laws  is  humiliating,  degrading 
and  debasing.  There  is  in  every  heart  an  innate 
shudder  at  the  prospect  of  the  poorhouse,  a  loathing 
of  the  beggar's  condition.  Many  a  worker,  male  or 
female,  would  rather  enter  the  vallev  of  the  shadow 
of  death  than  the  hated  confines  of  the  almshouse. 
Out  of  this  dread,  fear  and  hate  of  anything  savorir  j 
of  public  charity  have  come  in  this  country  the 
organized  efforts  or  associations  for  the  relief  of  the 
aged  deserving  poor. 


CHAPTER  I 

Labor  Organizations 

The  American  Federation  of  Labor  reported,  in 
February,  1910.  one  hundred  and  nineteen  national 
and  international  unions,  representing  approximately 
twenty-seven    thousa-d    local    unions.    There  are 
several  hundred  local  bodies  not  affiliated  with  the 
Federation.    These  unions  were  organized  primarily 
for  the  protection  and  advancement  of  the  interests 
of  people  employed  in  the  same  or  similar  lines  of 
labor.   Their  primary  purpose  is  often  stated  as 
"collective  bargaining." 

At  first,  their  financial  undertaking  was  limited 
to  the  Creadon  of  funds  for  preservation  of  their 
rights,  especially  in  disputes  with  employers.  The 
payment  of  benefits  was  a  later  development  of  the 
system  and  the  scope  of  financial  benefits  has  very 
slowly  widened.    The  Twenty-third  Annual  Report 
of  the  Commissioner  of  Labor  (1908)  presents  a 
study  of  about  one  thousand  two  hundred  funds 
operated  by  workingmcn  in  connection  with  their 
various  organizations.    These  cover  a  great  variety 
of  benefits,  -  temporary  disability,  permanent  dis- 
ss 


56   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ability,  death,  unemployment,  shipwreck,  tool  insur- 
ance, looking-for-work  travel,  etc.,  etc. 

The  Commissioner  of  Labor  ^  summarized  the 
benefits  paid  for  one  fiscal  year  by  the  organizations 


in  his  investigation  as  follows :  — 

Temporary  disability   SS.5;,76o.69 

Death  of  members   5, 164. ,585.06 

Death  of  members'  wives   55,020.00 

Death  of  widowed  mothers   1,240.00 

Permanent  disability   684,775.00 

Superannuation   198,618.65 

Other   892,321.63 

Total   $7,829,121.03 


It  will  be  seen  from  the  above  summary  that  only 
about  2  J  per  cent  of  all  the  benefits  paid  out  by 
these  organizations  for  one  year  was  for  the  relief  of 
the  aged  dependent  members. 

The  following  summary  of  what  the  unions  are 
doing  along  this  line  is  presented  as  an  example  of 
the  interest  which  is  manifest  among  the  laboring 
people  in  the  solution  of  a  great  economic  problem. 

The  Amalgamated  Society  of  Carpenters  and 
Joiners,  organized  in  Great  Britain  in  i860  and  main- 
taining about  threescore  branches  in  the  United 
State's,  with  a  membership  in  the  United  States  and 
Canada  amounting  to  about  seventy-five  hundred, 
provides  for  a  superannuation  benefit  for  each  mem- 
'  Twenty-third  Annual  Report,  page  35. 


LABOR  ORGANIZATIONS  57 

ber  fifty  years  of  age  and  incapable  of  earning  usual 
wages,  such  benefit  being  $2.80  per  week  if  the  mem- 
ber has  been  twenty-five  years  continuously  in  the 
society;  and  $2.45  per  week  if  he  has  been  eiguteen 

yeurs  in  the  society.  This  labor  organization  reports 
(1908)  that  1818  members  had  received  superannua- 
tion benefits,  of  whom  thirty-nine  were  in  the  United 
States ;  and  that  the  annual  disbursement  for  such 
benelils  amounted  to  $180,814.70,  with  a  total  paid 
out  since  1867,  when  the  superannuation  benefit  was 
instituted,  amounting  to  $2,362,290.  Of  this,  how- 
ever, a  very  inconsiderable  amount  has  been  paid  to 
members  in  the  United  States. 

The  Cigar  Makers'  International  Union  of  America 
reports  that  it  has  imder  consideration  a  pension 
plan  for  its  members,  which,  if  adopted,  will  provide 
each  member  on  reaching  sixty  years  of  age  six 
dollars  per  month  if  he  has  contributed  for  a  period 
of  twenty-five  years.  Members  who  have  reached 
the  age  of  sixty-five  and  contributed  dues  for  thirty 
yearr,  shall  be  entitled  to  seven  dollars  per  month, 
which  is  to  be  increased  to  eight  dollars  per  month  at 
seventy  and  to  ten  dollars  per  month  at  eighty. 

The  International  Jewelry  Workers'  Union  pro- 
vides in  its  constitution  that  any  member  of  a  local 
union,  after  twenty-fivc  years'  membership  and  on 
reaching  the  age  o£  sixty,  shall  be  entitled  to  twelve 


58  OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


dollars  per  month ;  and,  on  reaching  the  age  of  sixty- 
five,  after  having  been  a  member  for  thirty  years, 
he  shall  be  entitled  to  sixteen  dollars  per  month. 

The  Amalgamated  Society  of  Engineers  provides 
superannuation  benefits  for  members  reaching  fifty- 
five  years  of  age,  according  to  their  grades  in  four 
classes  of  two  sections,  as  follows :  — 

Full  Members 

First  Class      40  or  more  years'  membership  $3.00  per  week 

Second  Class   35  years  of  membership  a.70  per  week 

Third  Class     30  years  of  membership  a.40  per  week 

Fourth  Class   as  years  of  membership  a.  10  per  week 

Mackimst^ectioH  Members 

First  Class    40  or  more  years  of  membership  $3.40  per  week 

Second  Class  35  years  of  membership  a.  10  per  week 

Third  Class    30  years  of  membership  1.80  p>er  wet-k 

Fourth  Class  25  years  of  membership  1.50  per  week 

This  Union  reports  one  hundred  and  eighteen  mem- 
bers as  having  received  superannuation  benefits  dur- 
ing the  year  1908,  amounting  to  $17,803.95.  As 
this  society,  however,  has  only  some  thirty-nine 
branches  in  the  United  States,  —  it  being  a  Great 
Britain  society,  organized  in  1851. — it  is  not  likely 
that  much  of  the  superannuation  benefits  reported 
was  received  by  members  in  the  United  States. 

The  Grand  IiilcrnaLioiiai  Brotherhood  of  Loco- 


LABOK  OKCANIZATIONS 


59 


motive  Engineers,  organized  in  1863,  provides  what 
it  calls  an  "Indigent  Benefit";  for  the  purpose  of 
extending  relief  to  per«rns  who  by  age,  accident  or 
misfortiine  are  unab.;  '  perform  any  kind  of  labor 
and  have  no  one  to  taKc-  ->re  of  them  but  the  Brother- 
hood. No  member  can  receive  more  than  twenty 
dollars  per  month  from  this  fund.  The  total  paid 
during  the  year  ending  December  31,  1905,  to  indi- 
gent members  was  $24,820. 

The  Granite  Cutters'  International  Association  of 
America  provides  superannuation  benefits  for  mem- 
bers reaching  the  age  of  sixty-two;  each  one  of 
whom  who  has  been  in  good  standing  continuously 
for  twenty  years  is  entitled  to  a  superannuation 
benefit  of  ten  dollars  per  month  for  six  months  in 
each  year  thereafter.  There  were  sixty  members 
rqmrted  as  having  received  superannuation  benefits 
during  the  year  ending  February  28,  1907.  The 
amount  of  such  baiefits  was  not  reported. 
'  The  United  States  Letter  Carriers'  Retirement 
Association  has  an  elaborate  table  of  rates  for  the 
purchase  of  one  hundred  dollar  annmties  which  may 
begin  at  any  five-year  period  between  age  thirty  and 
seventy.  Annuity  certificates  are  issued  in  even 
sums  from  one  hundred  to  five  hundred  dollars. 
Membership  is  confined  to  members  of  the  National 
Association  of  Letter  Carriers.  It  was  organized  in 


6o     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


1902 ;  but  no  data  concerning  its  operations  or  num- 
ber of  members  are  available.  As  this  Association 
seems  to  be  making  a  serious  attempt  to  work  out  its 
pension  plans  correctly,  and  is  therefore  a  beacon 
li^ht  to  other  labor  organizations  apparently  groping 
in  darkness  along  the  path  of  attempted  relit  f  of  old 
age  dependency,  its  table  of  rates  is  given  herewith 
and  commended  to  the  careful  consideration  of  other 
similar  organizations: '  — 

TAHLE  VI 

United  States  Letter  Carriers'  Retirement  Association 

MONTHLY  PREMIUM  RATES  FOR  ANNUITIES  OF  ONE  HUNDRED  DOLLARS 


Monthly  Pkeuiuu  Raws  ro»  Annuity  beginntng  at  Ace  or  — 


Age  at 
Entry 


20 
21 
22 
23 
24 
25 
26 

27 
28 
29 
30 
31 
32 

33 
34 
35 
36 


iO     I  .(5 
Years  Yeans 


1347 
15.28 

'  7-53 
20.48 
2s-38 

2Q.86 


$ 

7.66 

8.39 
Q.ig 
10.21 

11-37 
12.77 

I4.4Q 
16.56 
19.41 
23.11 
28.31 


I 


I 


40 
Years 

4.83 
5. 20 

S-6.5 
S.Q8 
6.SQ 
7-3.5 
7.86 
8.62 
9-S6 
10.65 

I  I.Q7 

1358 
15.60 
18.19 
21.66 
16.52 


AS 

Years 

$~ 

3.19 
3-40 
3-''m 
3-88; 
4.16  I 

4.46 : 
4.80 ! 

5-17! 
5.60 1 
6.08 

6.6j 
7.26 
7.96 
8.84 
9.84 
11.06 
"•54 


so 
Years 


2.16  i 
2.29  1 

2-  43  : 

--S7  I 

2.73 

--.90 

3-  09 
3  30 
3.53 
3.81 
4.05 

4-  36 

4-  71 
S.io 

5 -  S3 
6.03 
6.60 


.?5 
Vfars 

$ 

1.47 

I-5S 
1.63 
1.72 
1.81 

I  93 
2.04 
2.16 
2.29 

2.45 

'■'■?,<■> 
2. So 

2. 94 
3-15 
3-37 
3.61 
3-88 


60 

\  '■ars 
$ 

0.09 
1.04 
1.10 
1. 14 
1.20 
1.27 
I 
1 
I 
I 
t 
I 


Years 


35 
42 

£1 ; 
so 

68 
79 
1.88, 
2.00  [ 

2-13 

2.26  i 
3.40 1 


$ 

0.66 
.69 
■73 
■76 
■79 
.84 
.88  ■ 

-93! 

■98  I 
I -03  i 
T.08 
1. 14 
1.21  ! 
1.27 

1-34 
1.42 

1.51 


70 

Years 


0-4S 
•47 
■49 
•SI 
•.S4 
.56 
-,S9 
.62 

■65 
.68 

■72 
.76 
■79 
■83 
.87 
•92 
•97 


'  Twenty-third  Annual  Report  of  the 
(1908),  page  120. 


Commissionw  of  Labor 


LABOR  ORGANIZATIONS 


6l 


MoMTBiv  Premium  Ratbs  tot  Anncity  BroiNNwc  at  Aci  or— 


30  I 
Yean  I 


35 
Years 


*>    I  4S 
Yfai»  i  Y»ars 


$ 

14.41 
i().8i 
20.01 
24-50 


so 
Years 

i~ 
8.03 

8.95 
10.06 
11.40 
1309 
15-27 
18.18 
22.26 


ss 

Years 


4.19 

4-  45 
4.92 

5-  37 
5-85 
6.36 
7-15 

7-  97 

8-  95 
10.15 
11.66 
13. Oo 

16. IQ 
19.83 


60 

Years 


t 

2.56 
2-74 

2-  94 
3.16 

3-  .^8 
3-65 
3-95 
4.29 
4.67 

5-  ii 
5.60 
6.22 

6-  9.^ 

7-  79 
8.83 

10.14 
U-83 
14.09 
17-25 


Yean 


$ 

1.60 
1.70 
1.80 
1.91 

2.30 
2.17 
2.32 

2.49 
2.66 
2.87 
3- JO 

3-  3f' 

i.uS 

4-  3'' 

4-  77 

5-  30 
S-9J 
6.63 

7-.SI 
8.61 
9.21 

II.Q4 

14.62 


It  may  be  remarked  that  one  of  the  provisions  of 
this  plan  is  that:  "If  an  annuity  member  does  not 
Kve  to  make  all  the  premium  payments  agreed  upon, 
or  in  case  he  becomes  mentally  inco.w  :tent,  the 
monthly  premium  payments  made  by  him,  with 
interest  at  4  per  cent  per  annum,  are  returned  to  his 
estate  or  to  his  le^  r^resentative." 


62   OLD  ACE  DEPENDENCY  IN  THE  UNITED  STATI8 

The  International  Aasodadon  of  Machinists,  organ- 
ized in  1888,  established  a  superannuation  benefit  in 
1903,  which  provides  that  any  member  who  has  been 
ten  years  in  continuous  good  standing  and  has 

reached  the  age  of  sixty-five  years  shall  receive  the 
sum  of  five  hundred  dollars ;  and  any  member  who 
has  attained  the  age  of  sixty  five  years,  after  twenty 
years  of  gocjij  standing,  shall  receive  the  sum  of  one 
thousand  dollars.  This  would  seem  (o  be  an  old  age 
endowment;  but  as  the  pa>ments  for  benefits  will 
not  begin  until  1913,  no  data  concerning  the  opera- 
tion of  the  fimd  are  availa!)Ie. 

The  Pattern  Makers'  League  of  North  America, 
organized  in  1893,  instituted  superannuation  benefits 
in  1900,  by  which  a  member,  after  twenty-fi\  e  years 
in  the  League,  and  on  reaching  the  age  of  sixty,  is 
entitied  to  twelve  dollars  per  month.  On  reaching 
the  age  of  sixty-five,  after  a  membership  of  thirty 
years,  he  is  entitled  to  twenty  dollars  per  month. 
The  superannuation  benefit  of  this  union,  however, 
will  not  be  operative  before  1920. 

The  United  Association  of  Journeymen  Plumbers, 
Gas  Fitters,  Steam  Fitters,  and  Steam  Fitters'  Helpers 
of  the  United  States  and  Canada  was  organized  in 
1889  and  instituted  superannuation  benefits  in  1902, 
which,  however,  are  not  yet  operative ;  but  provide 
that  any  member,  not  less  than  forty-five  years  of 


LABOB  OKGANIZAnONS  63 

age,  after  being  in  the  Uni^  rj.  for  thirty  years,  shall 
recdve  five  hundred  dollars;  if  his  membership  has 
been  under  thirty  years  and  more  than  twenty-five 
years,  four  hundred  dollars;  if  his  membership  has 
been  twenty  and  under  twenty-five  y^rs,  three 
hundred  dollars.  The  membership  must  be  con- 
tinuous, and  to  be  entitled  to  superannuation 
benefits,  the  member  is  required  to  furnish  physi- 
cian's certificates  showing  total  incapacity  by  old 
age  or  infirmity. 

The  Amalgamated  Association  of  Street  and  Electric 
Railway  Employees  of  America,  organized  in  1892, 
provided,  in  1895,  that  superannuation  benefits 
should  be  payable  when  the  amount  in  the  benefit 
fund  reaches  $10,000.  These  benefits  are  obtainable 
after  a  member  has  reached  the  age  of  sixty-five 
years  and  are  graduated  acojrding  to  his  length  of 
membership,  as  follows:  — 

10  and  under  15  years  $1.50  per  week. 

15  and  under  20  years  2.00  per  week 

Over  25  years  3.00  per  week 

It  is  reported  that  funds  are  being  accumulated  for 
the  purpose  of  pn   ;ding  for  these  benefits. 

The  Cicrman-.\nierican  T\pogr,  phia,  organized  in 
1873,  is  composed  of  printers  in  the  German  language; 
and  promises  superannuation  benefits  of  two  dollars 


64   OLD  AGK  DEPENDLNCY  IN   IUIl   LM.ED  STATES 

per  week.   The  number  of  members  and  operation 

of  the  fund  are  not  reported. 

The  Intcrriational  Typographical  Union,  organized 
in  185^,  <  stablishL'd  a  superannuation  benefit  fund 
March  1,  1908.  and  payment  <A  l)enclits  began  in 
August  of  that  year.    The  by-law  governing  the  fund 
provides  tliat  any  member  who  has  been  in  con- 
tinuous good  standing  for  a  period  of  twenty  years 
and,  on  reaching  the  age  of  sixty,  finds  it  impossible 
to  secure  sustaining  employment  may  receive  four 
dollars  per  week,  subject  to  certain  con^.  lions  which 
must  be  carefully  observed.   The  report  of  the 
officers  to  the  fifty-sixth  session  of  the  Union,  held 
August  8  to  13.  1910,  shows  that  the  total  amount 
paid  out  in  pensi<Mis  for  the  fiscal  year  ending  May  31, 
1910,  was  $106,740. 

The  above  sumn  arics  are  taken  largely  from  the 
Twenty-third  Annual  Report  of  'he  Commissioner  of 
Labor  for  1908,  on  "Workmen's  Insurance  and 
Benefit  Funds  in  ihe  Unitr*!  States." 

When  it  is  noted  iliat  among  literally  thousands  of 
labor  unions.  —  national,  international,  and  loral,  — 
'only  the  al)ove-nv  ntioncd  have  attompfcd  any  pro- 
vision whatever  for  the  relief  of  their  ag.  i  members, 
it  will  be  seen  how  inadequately  labcr  oif^mizations 
are  coping  with  the  problem  of  lirovidim,'  for  old  age. 
The  provisions  being  made  are  also  without  due 


OKGANUAflONS  6$ 

regard  to  the  requirements  of  actuarial  science.  On 
this  subject,  thf  '  >mmlssioner  of  Labor  expresses 
himself  in  the  following  cautious  language : '  — 

No  actuarial  examination  of  the  benefit  funds  of  the  vari- 
ous unions  has  v\xt  hv<  n  made.  The  unions  BontraHy  have  no 
separate  organization  of  a  benefit  fun.!,  .ilihouKil  in  a  numtnT 
of  rases  varying  amounts  are  set  aside  to  pay  claims  for  the 
various  benefits.  Whenever  the  amount  «o  set  aside  proves 
insufTicicnt,  recourse  is  had  either  to  paying  from  the  general 
fund  or  to  levying  an  assessment  on  members.  The  amount 
of  such  assessment  is  very  small,  either  for  the  reason  that  the 
sum  required  is  small  or  that  the  membership  is  large.  Other 
unions  depend  entirely  on  the  ^neral  fund  or  the  aaseaament 
scheme. 

The  primary  concerns  of  a  trade-union  are  the  wages  and 
working  conditions  in  its  particular  trade,  and  the  benefit 

featur-s  are  subordinate  and  inridental.    The  strength  of  the 
union,  if  not  its  very  life,  dtin  nd,  to  a  lar  ;,'  extent  on  its 
ability  to  enroll  in  its  membership  tiie  majority  ui  the  efficient 
workers  and  to  contmue  lo  draw  in  as  new  members  those 
vho  are  just  enii  ring  the   -aiifl.   The  life  of  a  union  is  not, 
therefore,  dependent  ,)t       ijenevolent  features    In  a  gro„ 
mg  country  the  ni;    icc.  -  ••  ,a  of  workers  to  practically  every 
branch  of  industry  generally  outnumbers  those  who  for  vari- 
ous reasons  dn-j  out  of  the  trade ;  if  the  union  is  able  to  secure 
!  majority  oi   ...h  neu-  (raftsmen,  it  will  be  able  not  only 
{x;rpetuate  itself  industrially,  but  also  to  maintain  its  knetit 
fund  intact.   Tlie  system  of  obtaining  revenue  is  such  an 
elastic  one  that  there  is  little  dang^T  that  any  org.inLz.\tion 
flour'  hing  industrially  will  not  raise  sufficient  money  to  keep 

'Twt  n  third  Annual  Report  of  the  Ccmimissioner  of  Labor 
(1908),  pa,  c  28. 

r 


66    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

up  its  benefit  funds.  In  the  case  of  organizations  which 
have  the  benefit  funds  aeinrately  organized  and  run  on  an 
insurance  policy-contract  plan,  the  necessity  for  an  actuarial 
examination  may  apfHy. 

The  summing  up  which  Mr.  Walter  E.  Weyl,  in 

his  report  on  "Benefit  Features  ol  British  Trade- 
Unions,"  gives,*  to  wit:  "While  the  superannuation 
benefit  brings  relief  in  certain  cases,  it  does  not 
begin  to  solve  the  problem  of  dependence  of  work- 
men in  their  old  age,"  is  as  pertinent  to  conditions  in 
the  United  States  from  the  trade-imion  standpoint  as 
in  England. 

■  Bulletin  of  the  Bureau  of  Labor,  1906,  page  826. 


CHAPTER  n 


Fraternal  Benefit  Societies 

Op  the  one  hundred  and  eighty-two  fraternal 
benefit  societies  of  a  general  or  national  character  in 
the  United  States,  there  are  forty-two  which  promise 
old  age  benefits,  usually  beginning  at  seventy  years 
and  nearly  all  specif>'ing  one-tenth  of  the  amount  of 
the  benefit  certificate  annually  until  such  instal- 
ments equal  the  total  amount  of  the  benefit  promised 
in  the  certificate. 

Measured  by  actuarial  standards,  many  of  these 
societies  in  the  past  have  operated  on  rates  which 
were  inadequate  even  for  death  baiefits.  Therefore, 
when  the  Massachusetts  Comnoission  on  Old  Age 
Pensions  embodied  the  following  in  its  report :  *  "We 
suggest  that  in  due  time  the  laws  governing  the 
operation  of  fraternal  beneficiary  corporations  be 
amended  so  as  to  enable  these  societies  to  pay  old 
age  benefits  under  supervision  by  the  State  Insurance 
Commissioner  as  regards  rates  of  assessment  and 
methods  of  administration,"  the  insurance  commis- 
sioners of  the  various  states,  at  their  National  Con- 

'  "Report  of  the  Commission  on  Old  Age  Pensions,  Annuities  and 
Insurance,"  page  ja;. 

67 


68     OLD  AGE  DEPENDENCY  IN  THE  tJNlTED  STATES 


vention  in  tqio.  declined  to  incorporate  the  sugges- 
tion in  their  draft  of  a  uniform  law  for  the  govern- 
ment of  such  societies,  the  Chairman  of  the  Stand- 
ing Conuuittcr  on  Fraternal  In>U!.in(r  exi)laining 
that  the  fraternal  system  <icnerally  had  such  a  stu- 
pendous ta>k  ahead  of  it  in  the  matter  of  readjusting 
its  rates  for  death  benefits  that  it  was  deemed  in- 
opportune to  permit  the  societies  to  enter  upon  a 
domain  that  might  only  complicate  and  hinder  the 
solution  of  their  present  problems. 

It  must  be  borne  in  mind  that  actuarial  science 
regards  a  promise  to  pay  benefits  in  case  of  death 
prior  to  age  seventy,  or  an  annuity  after  seventy,  as 
practically  an  endowment  at  seventy  years  of  age; 
and  if  a  contract  contains  any  such  guarantee  or 
promise,  it  is  valued  accordingly.    Only  recently 
have  some  of  these  societies  come  to  this  realization, 
and  unfortunately  they  have  attempted  to  re\ise 
their  laws  so  a?  to  eliminate  old  age  benelit^  from  the 
certificates  already  outstanding;  which  action,  liow- 
ever.  the  Supreme  Court  of  the  State  of  Xew  York 
has  declared  to  he  in  contravention  of  contractual 
•  rights;  the  court  also  holding  th.it  an  attempt  to 
readjust  r;ites  without  the  consent  of  the  individual 
members,  so  as  to  make  up  deficiencies  in  contribu- 
tions for  death  benefits  and  to  cover  the  additional 
cost  of  old  age  benefits,  b  likewise  a  violation 


FRATERNAL  BENEFIT  SOCIETIES  69 

of  property  rights.  Decisions  by  the  courts  of  last 
resort  in  other  states  are  following  this  trend  of 

judicial  thought. 

Whai  pro\  isions  have  been  made,  even  could  they 
be  actuarially  sustained,  would  not  seriously  con- 
tribute to  tlu'  solution  of  the  old  age  dependency 
prohh-m,  since  statistics,  both  in  Anurica  and  in 
Europe,  show  conclusively  liiat  old  age  depenficncy 
begins  before  age  seventy  is  reachetl.  Mr.  Suther- 
land '  concludes  a  thorough  itnestigation  on  the 
question  of  age  element  in  these  wonl^ :  "As  regards 
the  age  limit  to  be  adopted  in  ordinary  cases,  sixty- 
five  years  has  been  more  favorably  received  than 
any  other.  It  was  accepted  by  each  of  the  com- 
mittees which  considered  the  subject  in  the  United 
Kingdom,  and  it  has  been  incorporated  in  most  of 
the  bills  promoted  for  pension  schemes  in  Parlia- 
ment." He  then  goes  on  to  show  that,  in  Denmark, 
the  minimum  age  limit  for  state  pensions  is  sixt\ 
years;  and  that  the  trade-unions  in  Great  Britain 
which  have  attempted  any  old  age  benefits  have 
uniformly  provifled  that  pensions  shall  begin  from 
sixty  to  sixty  li\e  years  of  age.  —  in  many  of  the 
unions,  the  exact  period  to  be  determined  by  the 
condition  of  the  applicant,  irrespective  of  his  having 
attained  any  lixed  age. 

'  "Oi(J  .Ari-  I't  nsidns,"  |)age  i2y  et  seq. 


70     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


It  must  be  seea,  therefore,  from  these  considera- 
tions that  the  fraternal  benefit  societies  in  America 
have  not  as  yet  under;  on  much  in  the  way  of  con- 
tributing to  the  relief  of  old  age  dependency. 

If,  however,  the  problem  is  to  be  solved  in  America 
by  the  purchase  plan,  fraternal  societies,  because  of 
their  operation  through  lodges,  will  he  an  efTective 
and  powerful  adjunct.  The  machinery  of  the  lodge 
is  ini'miiely  belter  than  that  of  town  or  community 
pcjor  laws,  under  which  reports  of  such  cases  as  the 
following  find  thtir  way  to  jniblic  j^rint : '  — 

riltstield,  Massachusetts,  September  23.  —  Mrt.  Mary 
McCarty,  of  West  Stockbridgc,  died  this  morning  in  a  little 
iw(i-r(x)m  shack,  at  the  age  of  one  hundred  and  twelve  years. 
She  had  lived  in  West  Stockhridge  for  sixty  years.  No  one 
knew  her.  exact  age,  but  two  years  ago  she  said  she  was  one 
hundred  and  nine  years  old. 

She  was  a  town  charge  and  was  allowed  to  live  alone  be- 
cause the  town  has  no  almshouse  ami  hoards  out  its  pcxjr.  .At 
intervals,  the  town  authorities  visited  the  old  woman  and 
sent  the  grocer  with  provisions.  In  summer,  she  cultivated 
potatoes  and  cabl)ages  and  stored  them  for  winter.  In  catfish 
season,  she  fished.   She  was  the  last  of  her  family. 

It  may  be  remarked  that  nearly  every  fraternal 
society  makes  provision,  either  through  the  adminis- 
tration of  temporary  disability  funds  at  (he  central 
office  or  the  operation  of  local  lodge  relief  plans,  for 

'  Spci  iul  tflcRram  to  the  Philadelphia  Publk  Ledger,  issue  of  Sep- 
tember 24,  191 1, 


FRATERNAL  BENEFIT  SOCIETIES  71 

the  care  of  its  living  members  in  sickness  and  acci- 
dent.  The  principle,  therefore,  has  been  recognized 
by  these  societies  that  their  purpose  is  not  merely 
relief  for  the  widow  and  orphan  when  the  bread- 
winner of  the  family  is  taken  away  by  death;  but 
also  for  the  relief  of  the  breadwinner  himself  in  his 
temporary  misfortune.    It  is  a  logical  conclusion  that 
this  provision  should  be  extended  so  as  to  provide 
for  the  permanent  misfortune  of  old  age.    In  the 
readjustment  of  their  plans  so  as  to  comply  with 
the  strict  requirements  for  actuarial  solvency,  as 
prescribed  by  the  new  uniform  law,  (ommonly  known 
as  the  "Mobile  Bill,"  for  the  government  of  these 
societies,  the  opportunity  is  at  hand  for  them  to 
make  provision  for  the  relief  of  their  aged  dependent 
members  and  thus  contribute  more  largely  in  the 
future  than  they  have  dreamed  of  doing  in  the  past 
to  the  solution  of  this  great  American  economic 
problem. 


CHAPTER  III 
Industrial  Estabushments 

It  is  am.i/.iriK  to  discover  liow  littk'  has  Ikcu  dont- 
in  the  sohition  of  the  old  at^e  depcndcmy  proljlcm 
l)y  the  great  industrial  i or]M;ration^  of  llii>  eountry 
which  engage  the  bulk  of  the  couiury's  money  in 
capitalization  and  produce  the  largest  proportion  of 
the  country's  wealth,  and  which,  in  carrying  on  their 
operations,  employ  literally  millions  of  men  and 
women.  In  the  preparation  of  this  book,  more  than 
a  thousand  letters  were  addressed  to  the  executive 
officers  of  these  corporations,  requesting  information 
relative  to  pension  plans  in  operation,  or  contem- 
plated, for  disabled  or  aged  employees.  The  follow- 
ing summary  of  the  plans  reported  will  show  how 
few  corporations  have  already  manifested  a  practical 
interest  in  this  ^nat  subject,  and  the  insuflkiency 
of  the  attempts  being  made  for  tlie  solution  of  this 
•great  industrial  prol^lcm  by  those  who  should  be 
most  interested  in  it. 

It  ii^  worthy  of  remark  chat,  in  cominunicatinu  the 
information  de>ired,  the  oiTuers  of  the  cor{>orations 
have  expressed  in  various  ways  the  underh  ing  motives 


INDUSTRIAL  ESTABLISHICENTS 


for  the  relief  of  their  aged  employees,  which  read  like 
the  summing  up  made  by  Mr.  F.  A.  Vanderlip : » — 

If  I  were  to  altempt  to  summarize  the  reasons  why  so 
many  corporations  are  beginning  to  provide  for  their  em- 
irfoyees  in  old  age.  I  would  say  that  they  embrace  such  con- 
siderations as  this :  — 

The  pension  attaches  the  employees  to  the  service  and 
thus  decreases  the  liability  to  strike.  It  makes  more  certain  a 
continuance  of  elTicicnt  nun  in  the  lines  of  worii  with  which 
they  are  perfectly  familiar.  Of  quite  as  much  importance  is 
the  fact  that  a  pension  system  enables  employers  to  dispense 
with  the  elderly  and  inefficient  and  thus  gives  constant  en- 
couragement to  good  effort  on  the  part  of  the  younger  men 
hoping  for  promotion.  When  enii)Ioyees  realize  that  unsatis- 
factor>'  conduct  may  at  any  time  lose  them  not  only  their 
present  position  —  a  loss  which  in  such  a  labor  market  as  ours 
might  be  easily  made  good  —  but  that  it  entails  further  the 
loss  of  a  very  vahiabU-  asset  the  employee'^  right  to  a  pension, 
the  incentive  to  good  cond"ci  is  greatly  increased.  It  operates 
especially  as  an  incentive  to  hold  men  between  the  ages  of 
forty  and  fifty  when  they  have  acquired  the  experience  and 
skill  which  makes  them  especially  valuable,  aud  prevents  their 
being  templed  away  by  slightly  increased  wages  for  a  tem- 
porary period. 

One  great  mannfrirturcr  states  that,  in  an  experience  of 
twenty-t'ive  yens,  he  hax  demonstrated  that  ir.  his  b""ines,n 
I  fH-T  cent  of  the  wages  fund  is  sulhcient  to  provide  for  the 
necessary  pensions,  and  this  employer  also  states  that  any 
business  which  cannot  stand  such  an  iiicrease  in  expenses  is 
so  unst.ilile  as  t  t  h<-  a  m.enace,  niiher  than  a  benefit,  not  only 
to  its  pro|)rietor.  hut  also  to  society. 


'  Conference  of  Charities  and  Correction,  Thiladelphia,  Pa.,  1906. 


74    OU)  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

Mr.  Vandcrlip  in  the  above  remarks  refers  to  the 
experience  of  one  corporation  which  has  had  a  pen- 
sion scheme  for  employees  in  operation  for  twenty- 
five  years.  There  are  very  few  corporations,  how-  ' 
ever,  which  have  had  any  sort  of  pension  plans  in 
operation  for  so  long  a  time,  as  will  be  apparent  from 
the  summaries  which  follow. 

The  American  Express  Company  presents  the  fol- 
lowing outline  of  its  pension  plans:  "Since  about 
1875,  this  Company  has  had  in  operation  a  plan  of 
pensioning  its  employees,  applicable  to  aU  who  have 
been  in  the  continuous  and  exclusive  service  of  this 
or  National  Express  Company  for  twenty  (20)  years 
or  more  and  who  have  become  worn-out  or  per- 
manently disabled  while  in  its  employ.   Such  men 
receive  pensions  based  on  one-half  the  average  salary 
paid  employee  for  past  ten  (10)  years  previous  to 
(late  of  discontinuance  from  service,  and  not  trceed- 
ing  a  ma.ximum  yearly  all(nvance  of  Five  PTundred 
Dollars  (S500).    Pensions  are  not  allowed  to  men 
entering  the  scrvire  of  the  Company  after  they  are 
forty  (40)  years  of  age,  except  such  men  Lva,)me 
.permanently  disabled  in  the  discharge  of  their  duties, 
or  defense  of  Company's  property.    The  Company 
reserves  the  right  to  retire  jny  employee  regardless  of 
his  physical  condition,  or  age  at  date  of  employment, 
when  he  reaches  the  age  of  suty  (60),  and  also  the 


INDUSTRIAL  £STABLISBIf£NI8  75 

sole  right  to  allow  or  discontinue  payment  of  pen- 
sions. All  aj^licants  for  pension  must  be  at  least 
sixty  (60)  years  of  age.  An  employee  cannot  enjoy  a 
pension  and  draw  salary  as  well.  Where  a  pensioner 
is  able  to  perform  any  duty  whatever  in  connection 
with  the  Company's  business,  he  may  be  called  upon 
to  do  so." 

Armour  and   Company  put   into  operation  on 
November  i,  iqu,  a  pension  fund  obh'gatory  upon 
all  otliccrs  and  employees,  except  unmarried  women 
who  may  decline  to  particii)ate  in  the  fund,  and 
minors  under  sixteen  jears  of  age  and  drawi:  };  les; 
than  ten  dollars  per  week.    The  administratic:.  , 
the  fund  is  in  charge  of  a  board  of  three  trustees 
chosen  by  and  from  among  the  members  of  the  direc- 
torate of  the  company.   The  company  obligates  itself 
to  contribute  to  the  fund  annual' /  such  amount  as 
the  board  of  directors  may  determine  upon,  until  the 
fund  reaches  one  million  dollars  and  to  keep  the 
fund  thereafter  equal  to  that  amount.  Employees 
contribute  3  per  cent  annually  of  their  salaries,  such 
contributions  to  be  deducted  from  their  monthly 
wages.    OfTiccrs  and  men  employees  who  have  been 
in  the  employ  of  the  company  for  twenty  consecutive 
years  may  be  retired  at  the  discretion  of  the  board 
of  trustees  on  reachin^r  the  age  of  fifty-seven ;  or.  on 
reaching  the  age  of  sixty,  may  be  retired  at  their 


76    Of.D  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

own  request;  or,  on  reaching  the  age  of  sixty-five, 
they  shall  be  retired  on  order  of  the  board.  Un- 
married women  employees  who  have  reached  the  age 
of  fifty,  after  twenty  continuous  years  of  service  in 
the  conipiny.  may  be  rctirid  cither  voluntarily  or 
compulsurily.    Liktui  .    after  fifict  n  yiars'  service, 
an  employee  m  iy  he  n  tin^!  for  ill  health  on  reaching 
age  litty-sevm,  if  a  man,  uml  lifty,  if  a  woman.  The 
pension  allowance  is  2  \)cr  ( cut  of  the  salary  at  the 
date  of  retirement  for  each  year  of  continuous  service; 
but  the  maximum  [)ension  .siiall  not  exceed  ih  thou- 
sand dollars  per  annum.    Provision  \-  made  when  hy 
a  widow  of  a  dec  ased  officer  or  employee  in  the 
company,  whose  term  of  service  was  not  le>3  than 
fifteen  years,  may  receive  a  pension  amounting  to 
I  per  cent  of  the  salary  of  her  husband  at  the  time  of 
his  decease  for  each  year  of  ser\'ice.   If  no  widow 
survives,  this  allowance  shall  go  to  the  children  under 
eighteen  years  of  age,  to  be  divided  among  them 
proportionately  until  each  reaches  that  age.   If  the 
employee  shall  have  died  before  completing  fifteen 
years  of  service,  the  amount  of  money  which  he 
paid  into  the  pension  fund,  with  interest  at  4  per 
cent,  computed  semiannually,  shall  be  returned  to 
his  widow  and  children.    On  the  death  ..f  a  pen- 
sioned emph)yee,  his  widow  and  his  children  under 
eighteen  years  of  age  shall  be  entitled  to  receive 


INDUSTIIAI.  ESTABLISRHENTS  77 

une-half  of  the  [xnsion  \vhi(h  thv  pensioner  was 
drawing  at  tia  time  <.f  his  death.  In  case  an  .  inployee 
voluntarily  retires  from  the  service  of  the  (ompuny, 
all  payments  made  by  him  to  the  pension  fund  shall 
be  returned  to  him,  without  interest.  In  ease  he  U 
discharged,  the  payments  made  by  him  are  returned 
with  interest  at  4  per  cent,  computed  semiannuaUy. 
Provision  is  also  made  that  in  case  the  demands  on 
the  pension  fund  become  excessive,  the  basis  of  cal- 
culafin-  the  pensions  shall  be  changed  so  as  to  safe- 
guard the  principal  of  the  fund. 

Boston  Consolidated  Gas  Company  reports  through 
its  treasurer,  under  date  of  September  11,  1911; 
"With  regard  to  pensions,  would  >ay  tli.  i.  while  we 
have  pensi<.n,.,i  several  of  oiir  old  employees,  we 
have  no  dclinite  pension  plan.  Any  pensions  that 
have  been  granted  .so  far  ha\e  been  based  on  the 
parlitular  needs  of  the  employee." 

Cambria  Steel  Companv  :  .\  mutu.il  h.n.  fit  asso- 
ciation has  been  conducted  in  ronne.  tion  with  this 
Company  for  twenty-seven  years,  the  :  tituiion 
of  which  was  amended  January  29,  1910,  so  as  to 
provide  for  a  pension  of  twenty  doUars  per  month  for 
members  of  the  associaUon  retired  because  of  per- 
manent disability  or  on  reaching  the  age  of  seventy, 
after  thirtv  >.  ,irs'  service  in  the  Cambria  Iron  Com- 
pany or  Cambria  Steel  Company.   Each  member  is 


MICROCOPY  RESOLUTION  TEST  CHART 

ANSI  ond  ISO  TEST  CHART  No.  2) 


/APPLIED  \M/\GE  Ir 


'C'-i  [ji'  wj- 


78    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

assessed  ten  cents  per  month  for  the  maintenance  of 
the  pension  fund.  During  the  year  19 lo,  the  col- 
lections amounted  to  $i8,62:?.33  and  the  disburse- 
ments on  account  of  pensions  to  $6800,  leaving  a 
balance  on  hand  of  $11,822.33. 

Chicopee  Manufacturing  Company  reports  its 
plan  of  giving  each  employee  the  privilege,  after  fifty 
years  of  continuous  service,  of  retiring  on  half  pay 
or  working  and  resting  intermittently,  —  receiving 
full  pay  while  at  work  and  half  pay  while  resting. 

Consolidated  Gas  Company  of  New  York:  This 
company  has  no  definite,  obligatory  scheme  of  pen- 
sions. Under  date  of  September  6, 1911,  the  treasurer 
writes:  "The  whole  matter,  however,  of  pensions, 
accidents,  and  sick  relief  and  kindred  matters  is  under 
consideration  by  a  committee  appointed  by  our 
President,  Honorable  George  B.  Cortelyou ;  and  it 
is  possible  that  when  the  committee  has  reported, 
some  changes  may  be  made  in  our  plans,"  etc.  He 
further  states:  "There  is  no  age  limit  for  retire- 
ment; but  employees  who  have  been  a  stipulated 
period  in  service  are,  if  incapacitated  for  further 
Vork,  entitled,  at  the  discretion  of  the  company,  to 
be  placed  upon  the  superannuation  list.  Our  usual 
course  is  to  compute  the  superannuation  allowance 
at  I  per  cent  for  each  year  of  service,  based  upon  the 
average  pay  of  the  five  years  preceding  retirement." 


INDUSTRIAL  ESTABLISHMENTS  79 

Deere  and  Company :  The  pension  plan  was  estab- 
lished January  i,  1908,    It  is  under  the  administra- 
tion of  a  Pension  Board  consisting  of  five  members  or 
employees  of  the  company,  appointed  annually  by 
the  Board  of  Directors ;  and  provides  that  any  em- 
ployee who  has  reached  the  age  of  sixty-five  and 
been  twenty  or  more  years  continuously  in  the  serv- 
ice of  the  company  may  be  retired  on  a  pension 
which  shall  be  computed  at      per  cent  of  the  aver- 
age annual  pay  during  the  ten  years  next  preceding 
retirement,  multiplied  by  the  total  number  of  >  ears 
in  the  service  of  the  company;  provided  that  no 
pension  shaU  be  less  than  eighteen  dollars  per  month. 
It  is  also  provided  that  any  employee  who  has  been 
at  least  ten  years  m  the  service  of  the  company  and 
becomes  totaUy  incapacitated  may,  upon  retirement, 
be  pensioned  at  the  discretion  of  the  company.  No 
deductions  from  employees'  wages  are  made  for  the 
creation  of  the  pension  fund. 

E.  I.  du  Pont  de  Nemours  Powder  Company: 
The  present  plan  was  adopted  January  i,  1908,  and 
is  under  the  direction  of  a  Board  of  Pensions,  con- 
sisting of  five  employees  of  the  company  appointed 
by  the  heads  of  the  various  departments,  subject  to 
confirmation  by  the  Executive  Committee.  Any  em- 
ployee who  has  been  continuously  in  the  service  of 
the  company  for  fifteen  years  may  be  retired  on  a 


8o    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

pension  to  be  paid  monthly  in  "an  amount  equal  to 
one  and  one-half  per  cent  for  each  year  of  service  on 
the  first  one  hundred  dollars  (or  any  part  thereof)  of 
the  highest  average  monthly  pay  of  the  employee 
during  any  year  of  the  last  ten  consecutive  years  of 
service  and,  in  addition  thereto,  an  amount  equal  to 
one-half  of  one  per  cent  on  any  excess  over  one  hundred 
dollars  of  such  average  monthly  pay  for  said  time ;  pro- 
vided, however,  that  in  no  case  shall  the  allowance 
madp  be  more  than  one  himdred  dollars  per  month." 
These  pensions  are  contributed  entirely  by  the  com- 
pany and  without  deductions  from  employees'  wages. 

Gilbert  and  Barker  Manufacturing  Company  pro- 
vides that  any  officer  or  employee  who  has  attained 
the  age  of  sixty-five,  after  twenty-five  years  of  con- 
tinuous and  satisfactory  service,  may  be  placed  on 
the  annuity  roll,  with  an  allowance  of  25  per  cent 
of  his  average  pay  for  the  ten  years  preceding  retire- 
ment ;  and  that  any  officer  or  employee  between  the 
ages  of  sixty  and  sixty-four,  who  has  been  for  twenty 
years  in  the  service  of  the  company,  may  retire  at 
his  own  request  or  may  be  relieved  from  further 
"Service  and  placed  on  the  pension  list,  with  an  allow- 
ance equal  to  50  per  cent  of  his  average  pay  for  the 
ten  years  preceding  retirement,  which  rate  will  con- 
tinue imtil  he  is  sixty-five  years  old  and  thereafter  be 
reduced  to  25  per  cent. 


INDUSTRIAL  ESTABLISHMENTS  8l 

Gorham  Manufacturing  Company  has  a  pension 
plan  which  has  been  operative  since  May  i,  1903, 
under  which  "Employees  whose  records  are  satisfac- 
tory to  the  company  will,  if  disqualified  to  work  on 
account  of  age  or  permanent  ill  health,  be  eligible  to 
pensions  under  the  foUowing  age  limits  and  terms  of 
service :  — 

70  years  of  age  .  .  .  25  years  continuous  service ; 
65  years  of  age  .  .  .  35  years  continuous  service ; 
60  years  of  age  .    .    .   40  years  continuous  service." 

The  pension  is  paid  monthly  in  a  sum  equal  to  one 
per  cent  for  each  year's  active  service,  computed  at 
the  wage  paid  at  the  time  of  enrollment ;  provided 
that  no  pension  shall  exceed  one  thousand  dollars 
yearly.  This  company  establishes  a  pension  reserve 
fund  by  setting  aside  a  sum  each  year  equal  to  one 
per  cent  of  the  entire  amount  paid  for  labor  during 
the  preceding  year.  It  also  provides  that  "when  the 
amount  paid  out  for  pensions  during  three  consecu- 
tive years  exceeds  by  five  per  cent  the  appropriation 
to  the  reserve  fund,  all  outstanding  pensions  shall  be 
scaled  down  to  come  within  the  average  of  the  three 
years'  appropriation  and  a  new  schedule  adopted  for 
future  pensions." 

Hibbard,  Spencer,  Bartlett  and  Company:  The 
pension  fund  of  this  company  was  established  Jan- 


Bi    OLD  AGE  DEPENDENCY  IN  THB  X7NITED  STATES 


uary  i,  1905 ;  and  is  under  the  control  of  a  committee 
of  five  consisting  of  the  president,  vice  president,  and 
three  directors  of  the  company.  This  is  a  contribu- 
tory scheme ;  and  all  employees  eighteen  years  of  age 
and  over,  excluding  stockholders  and  traveling  sales- 
men, are  required  to  contribute  a  sum  equal  to  2  per 
cent  of  the  annual  salary  received,  to  which  the  com- 
pany contributes  a  like  sum.  The  aggregate  of  all 
such  contributions  and  appropriations  is  set  aside 
and  invested  as  a  pension  fund.  Male  employees 
may  be  retired  at  sixty  years  of  age,  after  fifteen 
years'  service,  at  the  discretion  of  the  executive  com- 
mittee and  at  their  own  request  after  having  passed 
the  age  of  sixty-five.  Female  employees  may  be  re- 
tired at  sixty  years  of  age  after  fifteen  years'  service, 
at  their  own  request.  The  pension  allowed  is  paid 
biweekly  in  a  sum  equal  to  one-half  of  the  average 
biweekly  salary  during  the  previous  five  years;  pro- 
vided that  no  pensioner  jhall  receive  more  than  one 
thousand  dollars  per  year  imless  by  imanimous  action 
of  the  executive  committee,  and  provided  that  si*ch 
payments  shall  not  extend  beyond  a  number  of  ^  *  »rs 
'equal  to  the  period  of  service  which  the  employee 
rendered  the  company ;  except  that  an  employee  who 
has  contributed  to  the  fund  continuously  for  twenty 
or  more  years  shall  receive  a  pension  for  life.  The 
plan  also  provides  for  a  pendon  to  the  widow  of  a 


INDUSTRIAL  ESTABUSIIMENTS  83 

pensioner  for  the  period  of  five  years  foUowing  his 
death,  in  an  amount  equal  to  one-half  of  his  pension. 

This  allowance,  however,  ceases  on  her  remarriage. 
However,  on  her  death,  if  she  leaves  children,  her 
allowance  is  to  be  paid  to  them,  or  trustees  for  them, 
until  the  youngest  attains  eighteen,  —  each  child's 
interest  in  the  fund  to  cease  as  he  reaches  that  age. 
In  no  -jvent,  however,  is  the  allowance  to  be  con- 
tinued either  to  the  widow  or  to  the  children  beyond 
a  period  of  five  years  from  the  death  of  the  pen- 
sioner. No  provision  is  made  for  a  pension  to  the 
widower  of  a  female  pensioner,  but  her  children  are 
pensioned  in  the  same  amount  and  for  the  same 
time  and  under  the  same  rules  and  conditions  as 
though  they  were  the  duldren  of  a  male  pensioner. 
It  is  also  provided  that  "The  executive  committee 
may,  at  its  discretion,  and  to  such  an  extent  and 
during  such  a  period  as  it  may  determine,  permit  an 
indigent  father,  mother,  sister,  or  brother  of  a  de- 
ceased pensioner  to  share  in  the  benefits  provided 
for  in  this  paragraph  for  the  widow  and  children  of 
pensioners."   It  may  be  remarked  that  a  person 
retiring  from  the  service  of  the  company  shall  receive 
a  return  of  his  contributions,  with  simple  interest,  at 
3  per  cent  per  annum.    The  annual  statement  of  the 
pension  fund  for  1910  shows  a  balance  on  hand  of 
$103,830.75  after  paying  out  during  the  year  to  retir- 


84    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ing  employees,  principal  and  interest,  $1063.18  and 
to  pensioners,  $689^.46. 

The  International  Harvester  Company  organized, 
on  September  i,  1908,  a  benetit  and  pension  plan  for 
the  employees  of  the  parent  and  subsidiary  com- 
panies, making  the  following  announcement  as  to  the 
pension  system:  •  Board  of  Directors,  after 
careful  consideratic  a  the  subject  and  an  examina- 
tion of  the  various  pension  systems  now  in  opera- 
tion, have  approved  the  following  plan  as  the  best 
and  most  liberal  for  employees  who  by  long  and 
faithful  service  have  earned  an  ho.  .ble  retirement. 
The  Directors  establish  this  pension  fund  as  an  evi- 
dence of  their  appreciation  of  the  fidelity,  loyalty,  and 
efl&ciency  of  the  employees."  The  administration  of 
the  fund  is  in  the  hands  of  a  pension  board  consisting 
of  five  members  who  must  all  be  officers  or  employees 
of  the  company  or  companies  and  appointed  annually 
by  the  board  of  directors.  Provisions  are  made  for 
the  retirement  of  male  employees  after  seventy  years 
of  age  if  they  have  been  twenty  years  or  more  in  the 
service  of  the  company,  unless,  at  the  discretion  of 
the  pension  board,  they  are  continued  longer  in  active 
service;  and  such  employees  as  have  reached  the 
age  of  sixty-five  years  and  been  twenty  or  more 
years  in  the  service  may  retire  at  their  own  request 
or  at  the  discretion  of  the  board.  Female  employees 


INrUSTWAL  ESTABLISHMENTS  85 

Who  have  reached  the  age  of  sixty  must  retire  unless 
the  pension  board  in  its  discretion  continues  then-  m 
acuve  service.   Female  employees  may  retire  at  fifty 
after  twenty  or  more  years'  service,  if  they  so  request 
and  the  pension  board  deems  it  expedient.   The  basis 
of  pensions  is  stated  as  follows:  "For  each  year  of 
active  service,  an  allowance  of  i  per  cent  of  the 
average  annual  pay  during  the  ten  years  next  preced- 
ing  retirement ;  but  no  pension  shall  exceed  one  hun- 
dred dollars  per  month  or  be  less  than  eighteen  doUars 
per  month."   In  the  discretion  of  the  board,  the 
pension  may  be  continued  to  th  ^vidow  and  orphans 
of  a  pensioner  for  a  limited  period. 

Morris  and  Company :  The  administration  of  the 
pension  fmid  which  became  effective  January  i,  xgoo 
IS  m  charge  of  a  committee  of  five,  two  of  whom 
shaU  be  appointed  by  the  company  and  the  other 
three  elected  by  ballot  from  among  employees:  an 
employee  of  from  six  months  to  five  years'  service 
shall  be  entitled  to  one  vote;  from  five  to  ten  years 
two  votes;  from  ten  to  fifteen  years,  three  votes' 
and  fifteen  j^ears  or  more,  four  voter.   No  employee' 
however,  can  be  a  member  of  the  fund  unless  his' 
weekly  wages  exceed  ten  doUars.   All  officers  and 
other  employees  of  the  company  contribute  3  per 
cent  of  their  salaries  to  the  pension  fund.    The  pen- 
sions begin  at  the  age  of  fifty-five  if  the  officer  or 


86    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

liiiploycc  has  l)ci'n  for  twenty  consecutive  years  in 
the  service  of  the  company,  'i  he  pension  is  com- 
puted on  the  l>asis  of  2  per  cent  of  salary  for  each 
year  of  service,  with  a  maximum  pension  not  to 
exceed  five  thousand  dollars.  Any  officer  or  employee 
may  retire  on  account  of  ill  health  prior  to  age  fifty- 
five  and  receive  a  pro-rated  pension.  The  widow  of 
a  deceased  officer  or  employee  shall  be  entitled  to 
receive  one-half  the  pension  to  which  her  husband 
would  have  been  entitled,  but  such  pension  must 
cease  on  her  remarriage.  However,  in  case  of  her 
remarriage  or  deatli,  if  she  has  children  under  eighteen 
years  of  age,  her  pension  will  be  appwrtioned  among 
them  and  each  child  will  receive  his  interest  imtil 
he  reaches  the  age  of  eighteen.  The  widow  of  a 
deceased  officer  or  employee  who  has  not  completed 
twenty  years  of  service  shall  receive  an  allowance  ol 
I  per  coKt  of  the  salary  of  her  husband  at  the  time  of 
his  decease  for  each  year  of  his  service;  and,  in  the 
case  of  her  remarriage  or  death,  this  allowance  will 
be  apportioned  among  the  children,  as  above  indicated. 
In  case  of  the  voluntary  retirement  of  any  officer  or 
Qpiployee,  all  payments  made  by  him  shall  be  returned 
without  interest.  The  company  sets  aside  $25,000 
^ch  year  until  the  pension  fund  shall  reach  the  stun 
of  $500,000. 

National  Carbon  Company  reports  that  it  has  not 


INDtJSnUAL  ESTAIiLISUMENTS 


87 


yet  est;il)lishc.i  a  pension  or  retirement  fund,  but  that 
deserving  c.iscs  irc  considerately  treated,  --  the  .■How- 
anco  usually  bdng  hctmm  .30  and  50  per  cent  of  the 
wages  rc((  vcd  hiforc  retirement. 

The  Philadelphia  Electric  Company  established 
on  May  i,  i9„,  a  "Service  Annuity  Department 
under  which  all  employees  on  reaching  the  age  of 
Mxiy-five,  if  male,  or  sixty,  if  female,  mav,  at  their  own 
request  or  at  the  discretion  of  the  board  of  otBcers 
be  retired  from  active  service;  provided,  that  all 
persons  employed  after  May  i.  xpxi,  must  have  at 
least  fifteen  years'  service  to  their  credit  in  order  to 
receive  a  pension.   The  pension  is  provided  without 
deduction  from  the  employee's  wages  and  is  computed 
as  follows :  "For  each  year  of  service  two  per  c«itum 
of  the  average  yearly  pay,  based  on  the  rate  in  effect 
at  the  close  of  each  of  the  highest  ten  consecutive 
years  of  service";    provided  that  the  minimum 
annuity  shall  not  be  less  than  fifteen  dollars  per  month 
a^d  provided  further  that,  in  case  the  aggregate  pen- 
sions  exceed  the  amount  which  the  president  and  the 
board  of  directors  deem  advisable,  a  new  rate  of 
computation  shall  be  established. 
^  The  Pittsburg  Coal  Company  by  a  resolution  of 
Its  board  of  directors,  on  September  3.  T907,  extended 
Its  cooperation  with  its  mine  employees  under  its 
Employees'  ReUef  department,  which  had  been  in 


88    OLD  AGE  DEPENDEKCY  IN  THE  VNITEO  STATES 


operation  since  April,  IQ02,  so  as  to  arid  to  that 
(iojKr,  tmcnl  a  pension  fund  in  addition  to  the  funds 
already  provided  for  sickness,  accident,  and  death 
benetits.  The  management  of  the  fund  is  under  an 
advisory  committee  composed  of  the  general  manager 
of  mines  and  of  three  members  of  the  board  of  directors 
and  three  members  chosen  by  the  employees  from 
their  own  number.  The  fund  is  created  and  main- 
tained by  the  income  on  twenty-five  htmdred  shares 
of  Pittsburg  Coal  Company  preferred  stock,  which 
stock,  however,  must  bo  paid  for  before  any  pensions 
can  be  granted;  and  each  employee  contributes  tor 
this  purpose  three  cents  per  month  from  his  wages, 
which  is  supplemented  by  a  like  amount  from  the 
company.  Af*cr  the  stock  is  paid  for,  these  contri- 
butions from  employees  and  company  will  continue 
to  supplement  the  income  from  the  stock  available 
for  pension  purposes.  Pensions  are  granted  at  the 
rate  of  ten  dollars  per  month  to  employees  who  have 
been  in  the  service  for  ten  years  or  longer  and  have 
made  continuous  monthly  payment  of  dues  as  above 
specified  for  that  period  and  who,  through  old  age, 
accident,  or  sickness,  are  permanently  imfitted  to 
earn  a  living.  The  scheme  provides  that  claimants 
shall  not  be  disqualified  because  of  the  temporary 
cessations  of  employment  due  to  temporary  shutdown, 
for  any  cause,  of  the  mine  at  which  the  clainfuint  is 


INDUSTRIAL  ESTABLISHMENTS  89 

employed,  or  due  tu  his  accident  or  illness.  It  is  also 
provided  that  the  regulations  may  he  changed  from 
time  to  time  so  as  to  provide  for  ratable  in(  reases  in 
the  monthly  contributions  of  employees  and  employer 
in  case  the  fund  is  not  likely  to  he  suthcient  to  nicet 
the  demands  upon  it  or  in  case  larger  pensions  ar«; 
deemed  advisable ;  also,  that  if  the  pension  func! 
be  liquidated  at  any  time  and  the  twenly-hve  hu 
shares  of  the  company  stock  are  pai<i  for,  these  shares 
shaM  be  sold  in  the  open  market  and  the  proceeds 
ratably  distributed  among  the  parties  equitably  en- 
titled thereto. 

Proctor  and  Gamble  Company  has  a  pension  system 
which  has  been  in  effect  since  February,  1904 ;  and 
is  under  the  control  of  a  board  of  five  trustees  consist- 
ing of  the  president  of  the  company  and  four  members 
chosen  from  the  employees,-  two  from  the  office 
force  and  two  from  the  ope     ivcs.    The  fund  is 
created  by  setting  aside  fr',  hundred  dollars  semi- 
annually, —  one-half  o»  which  shall  be  taken  from 
each  prolit-sh   ,  g  divioi-.d  and  one-half  from  the 
company's  earnings.    Pensions  not  to  exceed  75  ptr 
cent  of  the  average  wages  during  the  last  two  years 
of  service  with  the  company  may  be  granted  to  any 
employee  who  has  been  in  the  continual  service  of  the 
company  for  not  less  than  seven  years,  where  perma- 
nent, partial,  or  total  disabihty  has  been  caused  by 


90    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

accident,  sickness,  or  old  age.   One  of  the  agreements 
between  the  company  and  its  employees  in  the  opera- 
tion of  this  plan  is  that,  so  far  as  possible,  the  company 
will  provide  every  employee  with  such  work  as  he  can 
readily  perform  and  at  such  rate  of  wages  as  is  usually 
paid  for  such  work.    Should  this  be  at  the  time  of 
retirement  a  lower  amount  than  the  pensioner  has 
been  accustomed  to  receive,  an  extra  grant  from  the 
pension  fund  will  be  made  so  that  his  wages,  together 
with  what  he  receives  from  the  pension  fund,  will  be 
equal  to  75  per  cent  of  his  customary  wages.    It  was 
found  in  the  operation  of  this  fund  that  the  provision 
for  setting  aside  five  hundred  dollars  semiannually 
was  not  sufficient;   and,  therefore,  tie  company 
entered  into  an  agreement  with  its  employees  to  the 
effect  that  if  each  man  contributed  one  hour's  pay 
every  four  weeks  to  the  pension  fund,  the  aggregate 
would  be  one  thousand  dollars  per  year  and  the 
company  would  contribute  a  like  amount.   The  com- 
pany reports,  under  date  of  August  2,  1911,  that  the 
plan  is  working  satisfactorily. 

Public  Service  Corporation  of  New  Jersey,  includ- 
ing the  Public  Service  Railway  Company,  the  Public 
Service  Gas  Company,  the  Public  Service  Electric 
Company,  and  allied  companies,  established  on  Jan- 
uary I,  191 1,  through  the  board  of  directors,  an  elab- 
ora,..  insurance  sickness  benefit  and  pension  system 


INDUSTRIAL  ESTABUSHMENTS  91 

for  employees  in  the  service  January  i,  191 1,  and 
whose  compensation  does  not  exceed  eighteen  hun- 
dred doUars  amiually.    The  system  is  under  the 
management  of  a  welfare  committee  composed  of  the 
officers  of  the  corporation;  and  the  entire  expenses 
are  assumed  by  the  companies  involved,  with  no  con- 
tributions exacted  from  employees.   Any  employee 
who  has  reached  the  age  of  sixty-five  and  who  has 
completed  twenty-five  years  of  continuous  service 
may  retire  voluntarily;  and  any  employee  who  has 
reached  the  age  of  sex  cnty  years,  after  twenty  years 
of  continuous  service,  is  retired  compulsorily.  In 
each  case,  the  pension  is  calculated  as  follows :  "For 
each  year's  service,  i  per  cent  of  average  wage  or 
salary  for  the  ten  years  preceding  retirement;  pro- 
vided, however,  that  no  pension  shall  be  less  than 
two  hundred  and  forty  dollars  annually." 

The  Sherwin-Williams  Company  is  operating  a 
pension  system  "with  a  view  to  recognizing  and 
rewarding  long,  efficient,  an<i  loyal  service."  The 
administration  is  in  the  hands  of  a  pension  board  con- 
sisting of  five  members  appointed  annually  by  the 
board  of  directors  or  by  the  president  of  the  company. 
Each  male  employee  on  reachmg  the  age  of  seventy, 
after  twenty-five  or  more  years  of  service,  shall  be 
retired  unless  the  pension  board  may  decide  to  keep 
him  in  active  service;  and  such  employee  may  be 


92     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

retired  at  his  own  request,  or  at  the  discretion  of  the 
board,  after  reaching  the  age  of  sixty-five,  with 
twenty-five  years  of  service.   Each  female  employee 
shall  be  retired  at  the  age  of  sixty,  after  twenty-five 
or  more  years  of  service,  unless  the  pension  board 
fixes  a  later  date  for  such  retirement ;  and  any  female 
employee  may,  at  her  own  request,  or  at  the  discre- 
tion of  the  board,  retire  at  fifty-five  if  she  has  been 
for  twenty-five  or  more  years  in  the  service.  Any 
employee,  male  or  female,  may  be  retired  at  any  time 
after  twenty  years  of  service  if  totally  incapacitated. 
The  pension  is  calculated  as  follows:  "For  each  year 
of  active  service,  an  allowance  of  i  per  cent  of  the 
average  annual  pay  during  the  ten  years  next  preced- 
ing retirement  and,  in  addition,  a  fixed  amount  of 
ten  dollars  per  month ;  but  no  pension  allowance  to 
exceed  one  hundred  dollars  per  month."   It  is  obli- 
gatory, however,  that  all  applicants  for  pensions 
shall  be  members  of  the  Benefit  Association  operated 
under  the  auspices  of  the  company.   At  the  discre- 
tion of  the  pension  board,  pension  allowances  may  be 
continued  to  the  widow  or  orphans  of  a  pensioner  for 
a  limited  time. 

The  Simonds  Manufacturing  Company  has  no 
regular  pension  system ;  but  the  auditor  of  the  com- 
pany reports,  under  date  of  August  4,  191  r,  that: 
"About  three  years  ago,  we  started  a  plan  to  take 


INDUSTRIAL  ESTABLISHMENTS  93 

care  of  our  older  employees.  This  plan  provides  that 
employees  shall  be  retired  at  the  age  of  seventy  years 
or,  upon  the  request  of  the  employee  himself,  he  may, 
if  agreeable  to  the  committee,  be  retired  at  any  age 
between  sixty-five  and  seventy.  Our  pension  pay- 
ments  are  based  on  the  term  of  service,  —  a  certain 
percentage  being  allowed  for  each  year.  No  pay- 
ments are  allowed  unless  the  employee  has  been  in 
the  service  of  the  company  for  twenty  years  or  more." 

The  Standard  Oil  Company  reports  a  plan  for 
annuities,  going  into  effect  December  i,  1909,  by 
which:  "First:  Any  officer  or  employee  who  has 
given  twenty-five  years  continued  and  satisfactory 
service  to  this  company  and  has  attained  the  age  of 
sixty-five  years  may  be  put  on  the  annuity  roll,  at 
the  discretion  of  the  directors;  and  receive  for  the 
first  year  after  retirement  an  annuity  of  50  per  cent 
of  his  or  her  average  pay  for  the  ten  years  preceding 
retirement;  the  annuity  after  this  first  year  to  be 
continued  at  the  rate  of  25  per  cent.    Second :  Any 
officer  or  employee  between  the  ages  of  sixty  and  sixty- 
five  who  has  been  twenty  years  in  the  service  of  this 
company  may  retire  at  his  or  her  own  request,  pro- 
vided the  directors  approve,  or  be  relieved  by  the 
directors  from  further  service  and  placed  on  the 
annuity  roll  at  an  annuity  equal  to  50  per  cent  of  his 
or  her  average  pay  for  the  ten  years  preceding  retire- 


mil 


I 


54    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ment;  such  rate  being  continued  up  to  the  time  the 
recipient  is  sixty-five  years  of  age  and,  thereafter,  at 
the  rate  of  25  per  cent,  —  the  annuity  at  the  rate  of 
SO  per  cent  to  be  for  not  less  than  a  period  of  twelve 
months."  All  annuities  under  this  plan  are  paid 
quarterly  and  terminate  on  the  death  of  the  bene- 
ficiary. 

The  Talbot  Mills  adopted  in  1903  a  pension  system 
available  to  all  employees  who  have  been  in  the 
service  of  the  company  for  at  least  fifteen  consecutive 
years.    The  annual  pension  in  each  case  is  a  percentage 
of  the  annual  wages  earned  during  the  ten  years 
next  preceding  retirement,  —  one  per  cent  per  year 
for  every  year  of  service  from  fifteen  to  thirty-five 
years  and  "for  periods  longer  than  thirty-five  years, 
the  percentage  shaU  be  50  per  cent" ;  but  no  pension 
shall  exceed  five  hundred  dollars.   Any  employee 
incapacitated  for  labor  may  be  retired  on  pension  at 
any  time.  Employees  on  reaching  the  age  of  seventy 
years  may  be  placed  on  the  pension  roll  at  their 
pleasure. 

The  United  Cigar  Stores  Company:  Under  date 
of  March  17,  1911,  the  secretary  of  this  company 
reported  that  no  satisfactory  retirement  pension 
system  had  yet  leen  adopted.  "We  cariy  life  insur- 
ance for  some  of  our  employees,  without  cost  to 
them.   This  has  been  based  on  the  yearly  earnings  for 


INDUSTRIAL  ESTABLISHMENTS  95 

one  year ;  for  instance,  if  his  earnings  for  one  year 
amounted  to  .Ifteen  hundred  dollars,  we  gave  him  a 
life  insurance  policy  for  that  amount.  ...  We  give 
you  these  facts,  not  in  (!'  ect  answer  to  your  letter; 
but  because  they  are  to  us  the  groundwork  for  a 
retirement  pension  system  which  we  hope  to  work 
cut  later  on." 

United  States  Steel  and  Carnegie  Pension  Fund, 
taking  effect  January  i,  1911,  "was  e?'  .ohsned  in  the 
year  1910  by  the  jowt  action  of  the  United  States 
Steel  Corporation  and  Andrew  Carnegie.   Its  pur- 
pose is  the  payment  to  employees  of  old  age  pensions 
from  the  income  of  the  fund.   For  this  purpose,  the 
United  States  Steel  Corporation  provided  $8,000,000, 
which  with  the  Carnegie  ReUef  Fund  of  $4,000,000 
created  by  Andrew  Carnegie  on  March  12,  1901, 
makes  up  a  joint  fund  of  $12,000,000."   This  pension 
fund  is  administexod  by  a  board  of  twelve  trustees 
through  a  manager  appointed  by  the  board,  with  such 
powers  and  duties  as  n.ay  be  given  lum  by  the  board. 
"Employees  of   he  UnUed  States  Steel  Corporation 
or  of  any  other  corporation  a  majority  of  whose 
capital  stock  is  owned  or  controlled  by  the  I   '  ed 
States  Steel  Corporation  or  of  the  board  of  tr  ies 
of  this  pension  fund,  may  obtain  pensions  under  the 
following  conditions:  First,  Pensions  by  compulsory 
retirement,  —  Ail  men  who  have  been  twenty  years 


96    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

or  longer  in  the  service  and  have  reached  the  age  of 
seventy  years  shaU  be  retired  and  nensioned.  All 
women  who  have  been  twenty  years  or  longer  in  the 
service  and  have  reached  the  age  of  sixty  years  shall 
be  retired  and  pensioned.   At  the  request  of  their 
employing  officers,  persons  employed  in  exec^tUve  or 
administrative  positions  may  be  allowed  to  continue 
m  active  service  after  reaching  the  ages  mentioned 
above.    Second:  Pensions  by  retirement  at  request, 
-  Any  man  who  has  been  twenty  years  or  longer  in' 
the  service  and  has  reached  the  age  of  sixty  years 
may  be  retired  and  pensioned,  either  at  his  own 
request  or  at  the  request  of  his  employing  officer. 
Any  woman  who  has  been  twenty  years  or  longer  in 
the  service  and  has  reached  the  age  of  fif  Ly  years  may 
be  retired  and  pensioned,  either  at  her  own  request 
or  at  the  request  of  her  employing  officer.  Third: 
Pensions  for  permanent  incapacity,  -  Any  employee 
who  has  been  twenty  years  or  longer  in  the  service 
and  has  become  permanently  totally  incapacitated, 
through  no  fault  of  his  or  her  own,  as  a  result  of  sick- 
ness or  injuries  received  while  on  duty,  may  be  pen- 
sioned at  the  discretion  of  the  board  of  trustees." 
The  mnthly  pension  is  based  as  follows:  For  each 
year  of  service,  i  per  cent  of  the  average  monthly  pay 
during  the  last  ten  years  of  service;  provided  that  no 
pension  shall  exceed  one  hundred  dollars  a  month  or 


INDUSTRIAL  ESTABLISHMENTS  gj 

be  less  than  twelve  dollars  a  month.  It  is  also  pro- 
vided that  if  the  basis  for  pensions  shaU  create  de- 
r:ands  in  excess  of  the  annual  income,  increased  by 
any  surplus  deemed  applicable  by  the  board  of  trus- 
tees, a  new  basis  may  be  adopted  reducing  the  pen- 
sions theretofore  or  thereafter  granted,  so  as  to  bring 
the  total  expenditures  within  the  limits  of  the  fund. 

The  Wells,  Fargo  and  Company  pension  system 
was  made  effective  from  January  29,  1903,  "for  the 
purpose  of  enabUng  employees  of  the  compan,  who 
have  rendered  long  and  faithful  service  to  retire  when 
they  have  attained  an  age  necessitating  reKef  from 
duty."  The  system  is  under  the  administration  of  a 
board  of  pensions,  consisting  of  the  managers  of  the 
Atlantic,   Central,  and  Pacific  Departments,  the 
G.^neral  Auditor,  and  the  cashier  of  the  bank  at  San 
Francisco.   The  rules  provide  t>at  all  officers  and 
employees  who  have  attained  the  age  of  seventy  years 
shall  be  retired ;  provided  that,  if  the  board  of  pen- 
sions deems  it  advisable,  an  employee  may  be  retained 
in  the  active  service  beyond  the-  age  of  seventy,  but  any 
such  officer  or  employee  shall  be  permitted  to  retire  if 
he  desires.    All  officers  and  employees  on  retiring  at 
seventy  shaU  be  pensioned  if  they  have  been  twenty- 
five  years  in  the  service.   All  officers  and  employees 
who  have  been  twenty-five  years  in  the  service  and 
are  incapacitated  between  the  age  of  sixty  and  seventy 


98    OLD  AGE  DEPENDENCY  IN  THE  UNITEO  STATES 


years  may  be  retired  and  pensioned.  The  pension 
allowance  is  on  the  following  basis:  "For  each  year 
of  service  an  allowance  of  i  per  cent  of  the  average 
regular  monthly  pay  received  for  the  ten  years  imme- 
diately preceding  date  of  retirement."  It  is  provided 
that  should  the  aggregate  pensions  exceed  the  amount 
available,  the  board  of  directors  may  adopt  a  new 
basis. 

The  Western  Electric  Company  pension  system 
was  inaugurated  March  26,  1906,  by  setting  aside 
$400,000  from  the  company's  profits  and  authorizing 
the  president  thereafter  to  have  sums  not  exceeding 
$150,000  annually  withdrawn  from  the  company's 
profits  and  added  to  the  pension  fund,  with  the  pro- 
viso that  if  the  aggregate  pension  allowances  exceed 
the  amount  available  from  the  pension  fund  at  any 
time,  a  new  basis  shall  be  established  for  proportion- 
ately reducing  the  pensions.   The  pension  fund  is  in 
charge  of  a  pension  board  consisting  of  five  officers 
or  employees  appointed  annually  by  the  board  of 
directors  or  executive  committee.   The  rules  provide 
that  all  employees,  on  reaching  the  age  of  sixty  years, 
after  twenty  or  more  years  continuously  in  the  serv- 
ice of  the  company,  may  at  their  own  request,  or 
at  the  discretion  of  the  pension  board,  be  retired  and 
placed  on  the  pension  list.    Also  that  any  employee 
retired  from  the  service  (presumably  before  the  pen- 


INDUSTRIAL  ESTABLISHMENTS  99 

sion  plan  went  into  operation)  after  thirty  or  more 
years'  continuous  service,  or  who  has  reached  the  age 
of  fifty-live  after  twenty-five  or  more  years  of  con- 
tmuous  service,  may,  on  the  recommendaUon  of  the 
president,  be  granted  a  pension.   Any  employee 
totally  mcapacitated  for  further  service,  after  ten  or 
more  years  in  the  continuous  employ  of  the  company 
may  be  retired  on  such  pension  as  the  pension  board 
may  determine.   The  pension  in  each  case,  for  age  or 
length  of  service,  is  computed  as  follows :  "For  each 
year  of  active  service  i  per  centum  of  the  average 
annual  pay  during  the  ten  years  next  preceding  retire- 
ment;  provided,  however,  that  the  pension  board  may 
at  Its  discretion,  base  such  pension  upon  the  averag^ 
annua]  pay  of  the  ten  consecutive  years  of  service 
dunng  which  the  retired  employee  was  paid  the  highest 
rate  of  wages."   It  is  also  provided  that,  at  the  dis- 
cretion  of  the  pension  board,  pensions  may  be  con- 
tmucd  to  widows  and  orphans  for  a  period  not  exceed- 
mg  one  year  from  the  date  of  death  of  the  pensioner. 

The  Westinghouse  Air  Brake  Company  established 
Its  pension  system  Sepcember  17,  1908,  "for  the  pur- 
pose of  enabling  faithful  employees  to  retire  who 
after  rendering  long  and  efficient  service,  may  through 
age.  mfirmity,  or  injury  be  unable  to  continue  active 
employment."  The  company  set  aside  $xxo,ooo  as  a 
pension  fund,  with  a  provision  that  each  year  a  further 


lOO    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

appropriation  may  be  made,  not  to  exceed  $io,coo, 
to  meet  the  pension  allowances  of  such  year.  It 
also  provided  that,  in  case  the  demands  on  tb'^  fund 
exceed  the  resources,  a  new  basis  riitably  reducing 
the  pension  allowances  shall  be  established  to  bring 
the  expenditures  within  the  limit  of  the  fund.  The 
administration  of  the  fund  is  in  the  hands  of  a  board 
of  pensions,  consisting  of  five  officers  or  employees  to 
be  designated  by  the  board  of  directors.  All  em- 
ployees who  have  reached  the  age  of  seventy  years 
shall  be  retired.  This  rule  is  not  mandatory  upon 
executive  officers  appointed  by  the  board  of  directors. 
Such  retired  employees  shall  be  pensioned  if  they 
shall  be  twenty  or  more  years  in  continuous  service  of 
the  company.  All  employees  who  are  between  sixty- 
five  and  sixty-nine  years  of  age,  after  twenty  or  more 
years  of  continuous  service,  may  be  retired  and 
pensioned  for  incapacity.  Any  employee  with  a  clear 
ail  satisfactory  record,  who  has  reached  the  com- 
pulsory retiring  age  of  seventy,  while  lacking  less  than 
one  year  of  the  continuous  service  limit,  may,  at  the 
discretion  of  the  board,  be  pensioned  or  continued  in 
the  service  for  one  additional  year.  The  basis  for 
computing  monthly  pensions  is:  "One  per  cent  for 
each  year  of  continuous  service  based  on  the  average 
of  salary  or  wages  received  per  month  during  the  last 
ten  years  of  service"  ;  provided  that  no  pension  shall 


INDUSTXIAL  ESTABLTSHMKNTO  xoi 

be  less  than  twenty  dollars  per  month  or  more  than 
seventy-five  dollars  per  month;  and  provided  further 
that  the  board  of  pensions  may  increas'*  the  pension 
of  a  retired  employee,  not  to  exceed  ;s  per  cent  in 
cases  of  unbroken  jervice  of  forty  yeani  or  over  or  for 
other  adequate  reasons,  if  such  increase  shaU  not 
bring  the  pension  beyond  the  maximum  of  seventy, 
five  dollars  per  month.  It  is  also  stipulated  that 
"pension  allowances  shall  cease  upon  the  death  of  the 
pensioner  unless,  at  the  discretion  of  the  pension 
board,  in  exceptional  cases,  allowances  may  be  con- 
tinued to  widows  or  orphans  for  a  further  period  not 
exceeding  one  year." 

Witherbee.  Sherman  and  Co.apany,  Incorporated: 
The  general  manager  of  this  company  reports,  under 
date  of  August  12,  191 1,  that:  "No  general  plan  has 
been  worked  out  for  the  pensioning  of  old  employees ; 
but  we  have  taken  up  such  cases  on  their  merit  and 
are  paying  to  such  old  employees  a  pension  at  the 
rate  of  about  twenty  dollars  per  month." 

A  group  of  fourteen  public  service  compam'es  in 
New  England,  to  wit :  — American  Tar  Company, 
Maiden  Electric  Company,  Haverhill  Electric  Com- 
pany, Suburban  Gas  and  Electric  Company,  Exeter 
and  Hampton  Electric  Company,  Concoid  Electric 
Company,  People's  Gas  and  Electric  Company, 
Exeter,  Hampton  and  Amesbury  Street  Railway,' 


102    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


Chicopee  Gas  Light  Company,  Salem  Electric  Light- 
ing Company,  Springfield  Gas  Light  Company, 
Exeter  Railway  and  Lighting  Company,  Maiden  and 
Melrose  Gas  Light  Company,  and  the  Fitchburg 
Gas  and  Electric  Company,  —  which  are  under  one 
and  the  same  management,  has  promulgated  a  pension 
system  under  date  of  January  i,  igio,  by  which  it  is 
provided  that  any  employee  over  sixty  years  of  age, 
who  has  been  in  the  service  of  the  company  continu- 
ously twenty  years  or  more  and  becomes  physically 
disqualified,  may  be  pensioned  at  the  rate  of  i  per 
cent  per  annum  for  each  year  of  service  based  on  the 
average  yearly  wage  for  the  lait  ten  years;  with  a 
stipulation,  however,  that  no  pension  shall  be  less 
than  two  hundred  dollars  per  year.  In  case  of  the 
death  of  a  pensioner,  his  pension  may  be  continued 
for  the  benefit  of  his  viidow  and  orphans  for  the  further 
period  of  one  year.  Pensions  are  available  to  all 
employees  regardless  of  age  who  become  physically 
disqualified  after  twenty  years  of  continuous  service. 
The  total  limit  for  pension  disbursements  is  fixed 
at  twelve  thousand  dollars  annually.  Whenever 
amounts  due  pensioners  exceed  that  sum,  the  pensions 
shall  be  scaled  proportionately. 

First  National  Bank  of  Chicago :  The  '.ank  pension 
fund  was  inaugurated  May  i,  1899.  The  president 
states  in  a  letter  dated  September  7,  1911,  that  the 


INDUSTRIAL  ESTABLISHMENTS  103 

contributions  by  members  and  by  the  bank  now 
amount  to  something;  over  one  mil'ion  dollars  to  the 
credit  of  this  fund.    Any  oflicer  or  emph /ec,  on 
attaining  the  age  of  sixty-live,  shall  retire  from  the 
service  of  the  bank  unless,  for  special  reasons,  the 
bank  may  vAah  him  to  continue  in  its  service  and  he 
consents  thereto.   The  pension  fund  is  created  by  a 
deducUon  of  3  per  cent  annually  from  the  salaries  of 
officers  and  employees  in  the  service  of  the  bank. 
It  may  be  mentioned  that  the  NaUonal  Safe  Deposit 
Company  and  the  First  Trust  and  Savings  Bank,  as 
weU  as  the  former  officers  and  employees  of  the 
Union  National  Bank  of  Chicago  and  the  MetropoUtan 
National  Bank  of  Chicago  before  their  amalgama- 
tion with  the  First  National  Bank,  are  participants 
in  the  fund.    Pensions  are  based  upon  one-fiftieth 
of  the  salary  of  the  o*Ticer  or  employee  at  date  of 
superannuation  for  each  >  •  ir  of  ser^■i.e,  —  in  no  case, 
however,  to  exceed  Ihirty-rive  fiftieths  of  such  salary;' 
that  is  to  say,  on  a  salary  not  exceeding  ten  thousand 
dollars,  the  pension  shall  not  exceed  four  thousand 
dollars;  on  a  salary  not  exceeding  liftcen  thou- 
sand doUars,  the  pension  shall  not  exceed  five  thou- 
sand doUars;  on  a  salary  exceeding  fifteen  thousand 
dollars,  the  pension  shaU  not  exceed  six  thousand 
doUars.   It  is  also  provided  that  no  person  who  has 
been  with  the  bank  under  twenty-five  years  shaU 


104    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

receive  a  pension  for  a  longer  period  than  his  term  of 
service ;  and  that  no  pension  shall  be  granted  as  a 
general  rule  unless  the  pensioner  shall  have  completed 
not  less  than  fifteen  years  of  service  and  have  attained 
the  age  of  sixty  years;  also,  that  any  officer  or  em- 
ployee, on  reaching  the  age  of  sixty,  after  fifteen  years 
of  service,  may  voluntarily  retire  or  may  be  required 
by  the  bank  to  retire  on  a  pension.  In  case  any 
officer  or  employee  dies  before  completing  fifteen  years 
of  service  and  the  bank  does  not  see  fit  to  grant  a 
pension  to  his  widow  or  orphans,  it  may,  in  its  discre- 
tion, return  to  them  all  payments  made  by  him,  with 
interest,  computed  half-yearly,  at  the  rate  of  4  per 
cent  per  annum.  There  is  also  a  provision  whereby 
any  officer  or  employee  may  be  pensioned  for  ill 
health  or  affliction  resulting  in  incapacity  before  the 
age  of  sixty  years.  In  case  of  the  death  of  a  pensioner, 
his  widow  shall  be  entitled  to  receive  half  of  his  pen- 
sion, but  not  to  exceed  the  number  of  years  for  which 
the  pensioner  would  have  been  entitled  to  benefits. 
In  case  of  her  remarriage  or  at  her  death,  her  pension 
shall  be  apportioned  to  the  children,  each  receiving  his 
.  share  imtil  reaching  the  age  of  eighteen.  This  pen- 
sion plan  is  voluntary  for  all  officers  or  employees  in 
the  service  of  the  bank  at  the  time  of  the  adoption  of 
the  scheme;  but  compulsory  upon  all  who  enter  the 
service  after  its  adoption. 


INDUSTRIAL  ESTABLISHMENTS  105 

The  foregoing  summary  of  industrial  corporations 
having  pension  plans  in  operation  for  employees  is 
not  to  be  regarded  as  altogether  complete,  though 
every  effort  has  been  made  to  secure  data  from  all 
important  corporations  in  the  country.  All  which 
have  reported  the  establishment  of  pension  systems 
are  included. 

It  is  to  be  regretted  that  only  about  a  score  of  the 
thousands  of  manufacturing  enterprises  in  the  United 
States  can  be  included  in  this  summary  of  those  who 
have  crystallized  thought  for  the  relief  of  worn-out 
workmen. 

In  nearly  every  instance,  letters  from  the  managers 
who  ^ave  furnished  information  concerning  pension 
schemes  indicate  that  the  efforts  at  relief  have  been 
inspired  as  largely  by  economic  considerations  as  by 
altruistic.  To  keep  worn-out,  incapacitated  men  on 
the  pay  roll  is  an  economic  waste.  To  turn  such 
adrift  is  not  humane  and  exercises  a  depressing  influ- 
ence upon  workers  still  in  the  prime  of  life. 

Many  corporations  report  that  individual  provi- 
sion has  been  made  for  worn-out  or  incapacitated 
workmen,  —  each  case  being  dealt  with  on  its  merits. 
This  plan,  however,  is  recognized  by  advanced  thinkers 
in  the  employers'  domain  as  open  to  many  serious 
objections,  —  the  principal  of  which  is  the  suspidon 
among  employees  that  favoritism  and  partiality  may 


106    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

determine  the  fact  and  amount  of  pension,  which 
suspicion  seriously  affects  the  contentment,  loyalty 
and  industry  of  workmen  growing  old  in  the  corpora- 
tion's service. 

The  few  systems  of  pensions  that  have  been  devised 
by  industrial  corporations  are  ahnost  without  excep- 
tion inspired  by  economic  motives.   These  systems 
are  usually  accepted  by  employees  with  favor,  the 
pensions  being  recognized  as  in  effect  deferred  wage 
dividends  available  in  the  event  of  incapacity  or  old 
age.    Inquiry  among  employers  and  employees  in 
corporations  in  which  the  pension  system  is  recog- 
nized and  operating  sustains  the  a  priori  arguuient 
that  the  pension  system  has  already  done  much 
towards  bringing  employers  and  employees  together 
in  the  recognition  of  the  principle  that  the  interests 
of  both  classes  are  identical,  thereby  reducing  the 
likelihood  of  discontentment,  strife  and  strike,  and 
cultivating  harmony,  loyalty  and  efficiency. 

It  may  be  remarked  in  passing  that  many  of  the 
large  corporations  have  attempted  to  reach  the  same 
result,  with  what  success  is  not  yet  apparent,  by  intro- 
ducing profit-sharing  schemes  which,  in  many  in- 
stances, pre  directed  along  the  line  of  credits  to 
employees,  determined  largely  by  the  foremen  or 
overseers,  which  may  be  used  for  the  purchase  of 
company  stock  at  current  market  prices.  In  some 


INDUSTRIAL  ESTABLISHMENTS  107 

instances,  the  credit-sharing  scheme  is  hedged  about 
with  provisos  that  if  profit-sharing  employees  dispose 
of  stock  so  purchased,  they  shaU  therefor  become 
mehgible  to  share  in  further  profits,  except  at  the  will 
of  the  employer.    Such  provisions  do  not  make  for 
the  reUef  of  old  age  dependency.    They  may  be 
acknowledged  as  a  link  in  the  evolution  towards  this 
desirable  end;  but  the  data  concerning  the  operation 
of  the  scheme  are  so  meager  that  definite  results  can- 
not yet  be  predicted. 

Another  observation  in  passing  is  pertinent  on  this 
pomt,  viz.,  that  the  working  out  of  any  pension  scheme 
for  employees  with  one  corporation  only  as  the  unit  is 
problematical.   A  letter  of  inquiry  addressed  to  one 
corporation,  which  was  reKably  reported  as  having  a 
pension  plan  in  operation,  was  returned  unopened 
and  .tamped  "Firm  Dissolved."    The  question  natu- 
rally comes  to  the  mind  of  the  thinking  working  man  ; 
What  is  the  measure  of  the  disappointment  of  the 
scores,  p^-rhaps  hundreds,  of  emplovees  of  that  cor- 
poration who  were  looking  forward  to  pensions  for 
the  support  of  old  age  and  are  now  helpless  and  un- 
provided for  ?    Si,ch  a  condition  is  analogous  to  that 
of  the  crew  of  a  vessel  who,  after  a  long,  hard  vovage 
over  dangerous  seas,  with  food  exluiusted.  ncTves 
racked  and  strength  almost  gone,  have  only  one  hope 
left,  -  that  of  speedily  making  an  hospitable  harbor ; 


Io8    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

but  alas !  find  themselves  shipwrecked  upon  a  barren 
island. 

It  may,  therefore,  from  this  survey  be  concluded 
that  the  efforts  which  industrial  corporations  are 
making  for  the  relief  of  old  age  dependency,  in  view  of 
their  paucity  and  variety,  do  not  give  satisfactory 
ground  of  hope  that  the  ultimate  solution  of  the 
problem  can  be  reached  in  this  way.  At  best,  these 
efforts  are  a  makeshift ;  and  their  chief  value  is  that 
of  a  guideboard  along  the  roadway  of  the  ultimate 
happy  destiny  of  the  army  of  Amercan  toilers. 


CHAPTER  IV 


Transportation  Companies 

There  is  no  part  of  the  great  national  labor  machine 
that  wears  out  men  more  rapidly  or  subjects  them  to 
greater  hazard  than  that  which  we  call  "  transporta- 
tion."  EspeciaUy  is  this  true  of  those  engaged  in  the 
operation  of  trains  and  vessels  on  time  schedules, 
which  require  by  day  and  night  the  strictest  attention 
to  duty  and  rules.  Every  moment  is  fraught  with 
danger.   Bram,  nenre  and  muscle  are  all  subject  to 
the  severest  and  most  unexpected  strain.   Even  life 
itself  must  be  held  in  readiness  to  guard  other  Hves 
and  property  temporarily  entrusted  to  the  skiU, 
courage  and  experience  of  the  employee.    The  loco- 
motive engines  are  of  the  most  intricate  device  and 
require  the  keenest  intelligence,  quickest  action  and 
oftentimes  the  most  prolonged  tension  of  mind  and 
body.    This  is  true  of  the  operation  of  transportaUon 
machines  by  land  and  water;  and  there  is  hardly  a 
man  who  spends  his  hfetime  in  the  employ  of  a  trans- 
portation company  who  at  some  moment  has  not  been 
caUed  upon  to  act  the  part  of  a  hero,  -  a  part  per- 
haps unknown  save  to  himself  and  his  immediuie 


109 


IXO    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

associates.  Of  all  great  industrial  envloyments, 
that  in  connection  with  the  transportation  systems  of 
the  country  deserves  the  most  ample  and  prompt 
relief  from  the  distress  of  an  old  age  in  want.  As 
yet,  however,  few  of  the  transportation  companies 
have  undertaken  general  relief  for  their  employees 
along  this  line. 

The  following  summaries  of  steam  railroads,  electric 
lines  and  steamship  companies  are  the  result  of  a 
most  thorough  and  comprehensive  inquiry  into  the 
pension  systems  devised  for  employees  in  this  class  of 
American  corporations. 

A.  Steam  Railroads 

The  Baltimore  and  Ohio  Railroad  was  the  pioneer 
in  this  country  in  the  movement  to  pension  its  em- 
ployees, having  adopted  the  system  in  1884.  It 
reports  the  mean  number  of  employees  for  the  fiscal 
year  as  54.554,  with  the  total  number  of  pensioners 
from  October,  1884,  to  June  30,  1910,  as  1402,  with 
total  pensions  paid  out  amounting  to  $1,406,902.53. 
On  June  30,  1910,  there  were  667  pensioners  still  on 
the  rolls;  and  the  amount  expended  for  the  fiscal 
year  was  $157,273.81.  The  compulsory  age  of 
retirement  is  sixty-five,  after  ten  years  of  service, 
with  a  provision  that,  at  any  time  under  sixty-five, 
an  employee  may  be  retired  and  pensioned  "if  the 


raANSPORTATION  COMPANIES  m 

circumstances  justify  and  the  condition  of  the  fund 
permits."  The  pension  is  computed  on  the  basis  of 
I  per  cent  of  the  average  wages  for  the  last  ten  years 
of  service. 

The  Cleveland  Terminal  and  Valley  Railway, 
reporting  1079  employees,  instituted  its  pension 
system  in  1895;  and  reported  seven  pensioners  on  the 
roll,  with  annuities  amounting  to  $772.25  in  1906 
As  this  road  is  a  subsidiary  part  of  the  Baltimore  and 
Ohio  system,  its  retirement  rules  are  similar  to  those 
of  the  general  system. 

The  Chicago  and  North  Western  Railroad  placed  its 
system  of  pension  retirement  in  effect  in  1900  ;  and 
among  48.723  employees  reported  for  1906  has  a 
pension  list  of  355,  with  $89,330.87  as  annual  disburse- 
ments on  this  account.  The  pension  basis  is  i  per 
cent  of  the  emplo>-cc's  wages  for  the  last  ten  years  of 
service.  The  retirement  age  is  sixty-five,  voluntary, 
and  seventy,  compulsory,  after  twenty  years  of  service.' 

The  Pennsylvania  Railroad  placed  its  pension  sys- 
tem in  operation  in  1900;  and  in  1909  reports 
2320  pensioners  on  the  roll,  with  an  expenditure  for 
that  year  of  $593,632.45.  Its  pension  is  likewise 
based  upon  i  per  cent  of  the  average  earnings  of  the 
employee  for  the  last  ten  years  of  service;  and  the 
retirement  age  is,  voluntary,  sixty-five;  compulsory 
seventy,  after  thirty  years  of  service. 


213    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

The  Pennsylvania  Lines  west  of  Pittsburgh 
adopted  the  system  in  1901 ;  and  in  1909  gives 
84s  as  the  number  of  pensioners,  with  an  annual  dis- 
bursement of  $192,712.70  Oii  their  behalf.  The  basis 
of  pension  and  ages  of  retirement  are  the  same  as  in 
the  Pennsylvania  Railroad  Company. 

It  is  worthy  of  remark  that  the  Pennsylvania  Railroad 
system,  lines  east  and  west,  has  paid  out  in  pensions, 
to  the  end  of  1909,  an  aggregate  of  $5,512,529.57. 

The  Illinois  Central  Railroad  adopted  the  system 
in  1901 ;  and  in  1906  reports  232  pensioners  among 
38.563  employees,  -.vith  an  annual  expenditure  for 
pensions  amounting  to  $47,126.01.  Its  basis  o*'  'Com- 
putation is  I  per  cent  of  the  average  earning  'he 
last  ten  years  cf  service ;  and  its  retirement  agca  are 
sixty-five,  voluntary,  and  seventy,  compulsory,  after 
ten  years  of  service.  The  vice  president  reports 
that:  "During  a  period  of  nearly  nine  and  one-half 
years  that  our  pension  system  has  been  in  operation, 
the  company  has  paid  in  pensions  an  amoimt  closely 
approximating  a  half  million  dollars,  the  average 
pension  fluctuating  between  nineteen  and  twenty 
dollars  per  man  per  month." 

The  Delaware,  Lackawanna  and  Western  Railroad 
adopted  the  system  in  1902 ;  and  for  the  fiscal  year 
ending  in  1907  reports  $19,540.46  as  payments  to 
217  pensioners  out  of  37,273  employees.   Its  basis  of 


TRANSPORTATION  COMPAMES  113 

computation  is  i  per  cent  of  the  average  wages  in  the 
last  ten  years  of  service;  and  its  retiring  ages  are 
sixty,  voluntary,  and  seventy,  compulsory,  after  twenty- 
five  years  of  service. 

The  Philadelphia  and  Reading  Railway  Company 
established  its  pension  system  in  190.;  and  for  the 
fiscal  year  ending  June  30,  1910,  out  of  27,933  em- 
ployees reports  256  on  the  pension  roll,  with  total 
pensions  paid  for  the  year  amounting  to  $79,824  76- 
an  average  monthly  allowance  to  each  pensioner  of 
536.14,  being  a  pension  payment  per  capita  of  em- 
ployees amounting  to  $2.85.   The  total  amount  paid 
out  by  this  company  for  pensions  for  the  nine  years  of 
the  operation  of  the  fund  is  $467,245.25.   The  average 
age  of  pensioners  placed  on  the  roUs  in  1910  was 
slxty-se^'en  >'ears  and  six  months,  as  compared  with 
seventy-three  years  of  those  placed  on  the  roll  in 
1902.    The  basis  of  computing  the  pension  is  i  per 
cent  of  the  average  pay  for  each  year  of  service  for 
the  ten  years  next  preceding  retirement.    The  retire- 
ment  age  is  seventy,   compulsory  and  sixty-five 
voluntary,  or  at  any  time  for  incapacity.  The 
employee  to  receive  full  pension  must  have  been  in 
the  service  continuously  for  thirty  years. 

The  San  Antonio  and  Aransas  Pass  Railway  Com- 
pany placed  its  pension  system  in  effect  January  i 
1903;  and  bases  the  pension  upon  i  per  cent  of  the 


114    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


average  regular  numthly  pay  received  for  the  ten 
years  preceding  retirement,  multiplied  by  the  total 
years  of  semce.  The  retiring  age  is  seventy,  com- 
pulsory, and  sixty-one,  voluntary,  both  after  twenty 
years  of  service.  No  data  have  come  to  hand  show- 
ing the  operation  of  the  system. 

The  Southern  Pacific  Company  placed  its  pension 
system  in  effect  January  r,  1903,  under  which  it  is 
provided  that  all  olncers  and  employees  must  be 
retired  at  the  age  of  seventy  and.  if  they  have  been 
twenty  years  in  the  service,  shall  be  pensioned. 
Train  operators  and  trackmen  m;.y  be  retired  at  the 
age  of  sixty-five  and,  if  employed  continuously  for 
twenty  years  prior,  may  be  placed  on  the  pension 
list.  Provision  is  also  made  for  pensioning  incapaci- 
tated officers  and  employees  at  any  time  after  twenty 
years'  service  in  the  case  of  females  and  twenty-five 
years  in  the  case  of  males.  The  pension  is  computed 
as  follows :  For  each  year  of  service,  i  per  cent  of  the 
average  regular  monthly  pay  for  the  ten  years  preced- 
ing retirement.  On  the  establishment  of  the  fund, 
the  company  set  aside  $100,000  for  annuities  and 
made  provision  for  appropriating  each  year  thereafter 
a  sum  not  to  exceed  $90,000.  In  the  event  that  such 
appropriations  are  not  sufHcicnt  to  meet  the  require- 
ments of  the  fund,  the  board  of  directors  may  estab- 
lish a  new  basis  for  its  operation. 


TRANSPORTATION  COMPANIES  115 

The  Buffalo,  Rochester  and  Kttoburgh  RaUroad 
Company  placed  its  pension  system  in  effect  July  x 
1903.    For  the  year  1906  it  reports  twelve  pensioners' 
on  whose  behalf  a  disbursement  of  $5.89.58  is  made.' 
Ihf  basis  of .  omputation  is  2  per  cent  of  the  average 
wages  for  the  last  ten  years  of  servic  e  and  the  retir- 
ing ages  are  sixty,  voluntary.  ..ul  sixty-five,  com- 
Pulsory,  after  twenty  years  of  service. 

The  Atlantic  Coast  Line  Railroad  pension  svstem 
became  effective  February  x,  :,o4.  For  ihc'iiscai 
year  «iding  in  1907  it  reports  llfty-twu  pensioners 
out  of  17,218  employees,  with  a  total  annuity  of 
*53i9.io.  Its  basis  of  computation  is  i  per  cent  of 
the  average  wages  for  the  last  ten  years  of  service  • 
i  d  retiring  ages  sixty-five,  voluntary,  and  seventy' 
compulsory,  after  ten  years  of  service. 

The  Chicago,  St.  Paul,  Mimieapolis  and  Omaha 
Railway  Company  put  its  pension  system  into  effect 
April  X  X906;  and  on  December  i.,  X910,  the  Secre- 
tary of  the  Pension  Board  reports  that  sixty-seven 
pensions  have  been  granted,  -  twenty-nine  on  the 
ground  of  seventy  years  of  age  and  thirty-eight 
because  of  permanent  disability.    Fifteen  pensioners 
had  died  up  to  that  time,  leaving  fifty-two  on  the 
roll.    An  employee's  pension  at  seventy,  after  twenty 
years  continuous  service,  is  based  on  x  ner  cent  of 
his  average  pay  for  the  preceding  ten  years. 


Il6    OLD  AGE  Dia»ENDENCY  IN  THE  UNITED  STATES 

The  Atchison,  Topcka  and  Santa  Fc  Railway  Com- 
pany placed  its  pen  'on  system  in  force  on  January 
I,  1907;  and  for  that  year  reported  sixteen  pen- 
sioners out  of  a  total  of  about  55,000  employees,  with 
an  annuity  of  $1341.68.  The  pension  is  based  upon 
I J  per  cent  of  the  average  wages  for  the  last  ten  years 
of  service,  and  is  granted  after  fifteen  years  of 
continuous  service,  if  the  applicant  has  reached  sixty- 
five  years  of  age. 

The  Chicago,  Rcuk  Island  and  Pacific  Railway 
Company  ("Rock  Island  Lines")  established  a  pen- 
sion sclu  nu'  for  oflkers  and  employees  on  December  11, 
i()Oi),  clTtH  tivo  January  i,  iqio,  under  which  retire- 
ment is  t()mj)ulM.ry  for  all  oiriccis  and  employees  as 
they  attain  the  a^a-  of  seventy  years.  Locomotive 
engine»;rs  and  firemen,  conductors.  Ilagmen  and  brake- 
men,  train   t)agg..^i men.   yardmastLr>.  swiuhnien, 
roadmasters,  bridge  foremen  and  section  foremen 
may  be  retired  at  the  age  of  sixty-five  years.   OlTicc.  s 
and  employees  becomin?  permanently  incapacitated, 
after  twenty-five  or  -nore  years'  continuous  service, 
may  be  pensioned  and  retired  regardless  of  age.  The 
pension  allowance  is  computed  on  the  following  basis : 
for  each  year  of  service,  an  allowance  of  i  per  cent  of 
the  average  regular  monthly  pay  received  for  the  ten 
years  next  preceding  retirement. 
New  York  Central  and  Hudson  River  Railroad 


«*NSP01iTA,i0N  COWANIES  „, 

Company  «tablish«l  a  p««i„„  deparunent.  c,T..„ive 
lu  ....  o,  ...vonty,  rtu,  pemion  aUowance,  i/  .he 

'''''-won.yyjji 

tinuou.  .cTVi.  c,  ,f  unfitted  for  ,iutv    Th.  «  • 

menf    T»,  .  ^ "^''^t  P'-'-"<--eding  retire- 

ment. The  board  prov  ide..  Loux-ver.  that  in  L  tie 
demands  on  the  fund  evr,.,.,i  «  m  case  the 

new  Wi,       V  ^''^'"^  P^*"  annum,  a 

new  baas  may  be  estabHshed. 

The  MimieapoKs,  St.  Paul  and  Sault  Ste  Ar  • 

^^-yO^^pany  placed  its  pen.^ 

J%  r,  :9xo,  under  which  it  is  pnnidd  that  a 

officers  ana  employees  who  have  reached  the  ■  '  j 

-ty-ve  years  shall  be  retired,  unless  the  .pi 

-nt.  extend  individually  their  serWcet:^ 
>car.s.    Those  retired  after  fifteen  years  of 
shall  be  pensioned.    The  pension^!  h  ^ 
For  c  u  h  .       .      ^  ''^^^  as  follows : 

Ft  each  vear  of  service,  an  allowance  of  x  per  cent  of 

Z  --^Iv  pay  receive^f^Tthe 

ten  years  next  precedin,,  retirement. 

The  New  York,  New  Haven  and  Hartford  Railway 
Company  reports,  through  i,.  ...,,|.  ,  T 
datp  of  u  '  F'eMdent,  under 

aaie  of  December  3,  iqiq-  "ThJc  n 

6,19^0.     1  his  Company  has  no 


Il8     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

system  of  arbitrarily  retiring  employees  at  any 
speciljed  age ;  ljut  it  has  been  the  rule  that,  after  an 
employee  has  been  in  continuous  service  for  at  least 
thirty  years,  with  a  clean  record,  and  has  become 
incapacitated  for  further  work,  he  is  retired  on  a  pen- 
sion of  I  per  cent  per  annum  for  each  year  of  scr\'ice, 
based  on  his  average  wages  for  the  last  ten  years; 
but  in  no  event  to  exceed  40  per  cent.  Our  pension 
roll  to-day  aggregates  about  $100,000  per  annum." 

Another  railroad  company,  that  desires  that  its 
name  shall  not  be  made  pubUc,  reports  that  employees 
may  be  retired  from  the  service  upon  reaching  the  age 
of  seventy,  or,  if  permanently  incapacitated,  they  may 
be  retired  between  the  ages  of  sixty-five  and  sixty-nine. 
Upon  such  retirement,  if  they  have  been  in  the  active 
service  for  twenty-five  years,  pensions  will  be  awarded 
them  on  the  basis  of  i  per  cent  of  the  average  regular 
monthly  wages  during  the  preceding  ten  years  of 
active  service,  multiplied  by  the  number  of  years  of 
such  service. 

Another  company  reports  that  pensions  arc  granted 
at  the  discretion  of  the  president  and  chairman  of  the 
board. 

The  Ferrocarriles  Nacionales  de  Mexico  reports 
through  its  associate  secretary,  under  date  of  March  6, 
191 1,  that  the  matter  of  pension  system  has  been 
referred  to  a  commission  of  the  board  of  directors 


TRANSPORTATION  COMPANIES  up 

wi-th  a  prospect  that  favorable  action  will  be  taken  in 
the  near  future. 

In  v,ew  of  ,he  fact  that  the  Canadian  Padfic  and 
.rand  Trunk  Ra,lway  systems  have  ver,  dose  afflia- 
uons  .uh  th.  AnuTican  raflroads.  it  is  deemed  perti- 
n™  to  ,h,s  phase  of  0,e  subject  to  present  an  an^ysis 
^-f  tl  c  pcnston  <lepartments  of  these  two  systems. 

The  Canadian  Padfic  pension  system  was  maug- 
uratcd  December  8.        ;  a„„        ,  p„„.^„„ 
^he  pe„s,on.„g  „f  officers  „.  e„,p,.,ees  who  have  at- 
tamed  the  age  of  s,.v,y.five  years  or  have  been  Un 
years  o.  loa,.r  in  .he  co^p^ny's  service;  provided, 
that  f  an  employee  has  been  less  than  -en  years  in 
tte  servce,  he  may  be  retained  „„  the  active  list 
beyond  the  age  of  sixty-five.    The  co^ntittee  having 
»  charge  the  admmistration  of  the  pension  depart 
ment  may  retire  officers  and  employees  bcveen  the 

0  the  head  of  the  department  in  which  any  such  era- 
ployee  may  be  registered.   The  pension  allowance  is 

1  per  cent  per  amimu  for  yea,,  of  service,  based  upon 
tho  average  monthly  pay  recdved  for  the  ten  years 

preceding  retirement. 

The  Grand  Trunk  Railway  Pension  Department  was 

„t  '  J™-'^      '^^  "nder  whid, 

2Z  ""'P"'^'"^  at 

s.xty-nve  years  of  age  or  at  si.,ty        of  age  if  then 


I20    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

disabled ;  and  arc  pensioned  if  they  have  been  not 
less  than  twenty  years  in  continuous  service  of  the 
company.  Any  employee  who,  after  ten  jears  of 
continuous  service,  is  incapacitated  while  in  the  per- 
formance of  active  duty  may  receive  a  pension  during 
the  period  of  his  incapacity.  Pensions  are  based  upon 
I  per  cent  for  each  year  of  continuous  service,  on  the 
highest  average  rate  of  wages  during  any  ten  consecu- 
tive years  of  service ;  but  no  pension  shall  be  less  than 
two  hundred  dollars  per  annum. 

It  is  believed  that  the  foregoing  analysis  presents 
information  concerning  ever>'  railroad  on  the  North 
American  continent  that  makes  provision  for  the 
relief  of  its  aged  and  womout  employees.  This 
relief  is  granted  in  almost  every  case  as  a  gratuity  by 
the  company  and  without  any  special  contributions 
from  employees.  That  the  motives  inspiring  these 
great  transport  : tion  companies  are  largely  economic 
is  shown  in  nearly  every  case  in  the  preamble  or 
announcement  with  which  the  inauguration  of  the 
pension  scheme  is  accompanied. 
One  of  the  largest  railway  systems,  in  making  an 
^  announcement  through  its  president  recently,  uses 
the  following  language  to  express  this  sentiment :  — 

It  is  with  much  pleasure  and  satisfaction  that  I  issue  the 
accompanying  announcement  of  a  plan  adopted  by  the  Board 
of  Directors,  for  the  payment  of  pensions  to  loyal  and  faithful 


TRANSPORTATION  COMPARES  X2l 

employees  of  the  Company,  who  through  age  or  disabflity  are 
unable  to  continue  longer  in  the  scrvncc. 

The  success  of  the  Company  is  dependent  largely  upon  two 
factors,  VIZ.,  wise  and  conservative  management  by  its  Board 
of  D>rectors  and  ofTiccrs,  and  loyal  an.i  efficient  service  and 
cooperation  on  the  part  of  the  men  in  the  ranks.  I  trust  that 
the  esublishment  of  this  pension  plan,  entirely  at  the  expense 
of  the  Company,  will  be  accepted  as  an  expression  of  apprecia- 
tion of  faithful,  efficient  service  in  the  past  and  as  an  incentive 
for  renewed  effort  to  make  the  service  rendered  the  public 
still  more  efficient  and  valuable. 

It  is  hoped  that  it  will  be  found  possible  in  the  future  to 
make  more  liberal  provision  than  the  present  plan  permits 
especiaUy  for  those  who  receive  the  lowest  compensation' 
To  this  .;nd,  we  ask  the  hearty  cooperation  of  every  employee 
in  everything  that  will  promote  the  prosperity  of  the  Road 
as  upon  this  prosperity  depends  the  ability  of  the  Company 
to  make  such  increase. 

AU  of  these  non-contributory  pension  schemes  con- 
tain a  provision  that,  in  case  of  disabiUty  resulting 
from  intemperance,  immorality,  or  any  cause  within 
the  cmplo>'ee's  control,  a  pension  will  not  be  granted; 
or,  if  already  granted,  may  be  suspended  or  withheld.' 
This  condition  must  result  in  the  cultivation  of 
sobriety  and  uprightness  of  conduct. 

It  is  also  provided,  in  nearly  every  plan,  that  the 
promise  of  the  payment  of  a  pension  shall  not  be 
construed  as  giving  any  employee  a  legal  right  to 
be  retained  in  the  company's  service,  or  any  legal 
groimd  to  demand  a  pension. 


122    OLD  AGE  DEPENDENCY  IN  THE  XJNITED  STATES 

Nearly  all  of  the  companies  have  this  stipulation 
in  their  pension  plan :  "While  it  is  the  poUcy  of  the 
company  co  encourage  its  employees  to  remain  with 
it  and,  by  faithful  service,  to  earn  a  pension,  the  com- 
pany expressly  reserves  its  right  and  privilege  to  dis- 
charge at  any  time  any  officer,  agent,  or  employee  when 
the  interest  of  the  company,  in  its  judgment,  may  so 
require,  without  Uability  for  any  claim  for  pension  or 
other  allowance  than  the  salary  or  wages  due  and 
unpaid." 

It  is  usually  stipulated  also  that  the  acceptance  of 
a  pension  does  not  debar  a  retired  employee  from 
engaging  in  other  gainful  occupation ;  provided,  such 
occupation  is  not  detrimental  to  the  interests  of  the 
company  granting  the  pension. 

In  order  that  pension  allowances  shall  be  applied 
wholly  for  the  relief  of  the  pensioner,  it  is  especially 
provided  that  any  assignment,  or  attempt  at  assign- 
ment, of  a  pension  shall  be  sufficient  cause  for  its 
annulment. 

It  may  be  interesting  to  glance  at  the  English  rail- 
road pension  systems  as  the  prototype  of  those  in 

vogue  in  America. 

The  first  of  these  seems  to  have  grown  out  of  the 
Midland  Railway  Friendly  Society,  September  i, 
1859.  This  is  a  contributory  system  —  the  rate  of 
fortnightly  contributions  bemg  based  upon  age  at 


TRANSPORTATION  COMPANIES  123 

admission,  ranging  from  one  shilling  for  ages  under 

twenty-one  to  ten  shillings  at  age  thirty-five;  beyond 
which  age,  members  are  not  admitted.   These  con- 
tnbutions  provide  certain  benefits  in  case  of  sickness 
or  on  the  death  of  a  member  or  his  wife.    The  super- 
annuation allowance  provided  for  in  the  rates  begins 
at  age  sixty-five,  at  which  time  the  contribuUon 
ceases  and  the  pension  ranges  from  four  shillings  six- 
pence to  eight  shillings  per  week.    There  is  also  a 
voluntary  supplementary  pension  fund  whirh  in- 
creases the  superannuation  allowance  from  eight 
shillings  to  ten  shillings  per  week,  on  payment  of  a 
small  additional  contribution.   These  contributions 
are  returnable  if  a  member  retires  from  the  service 
voluntarily  after  eight  years;  but  not  if  he  is  dis- 
nussed  from  the  service  for  dishonesty.   It  is  also 
provided  that  in  case  of  a  member's  death  before 
receiving  the  pension,  the  amount  of  contributions 
shall  be  paid  to  his  family  or  legal  representative  A 
member  may  retire  from  the  service  voluntarily  at 
sixty;  and  must  retire  on  reaching  the  age  of  sixty- 
five.   And  his  annuity  for  life  amounts  to  a  propor- 
tion of  the  average  salary  received  by  him  from  the 
date  of  his  first  contribution  till  his  retirement  from 
the  service;  for  instance,  if  he  has  contributed  for 
ten  years,  his  yearly  amount  of  superannuation  in 
percentage  of  his  average  salary  would  be  twenty- 


124    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

five.   If  he  has  completed  thirty  years  of  contribu- 
tion, the  yearly  amount  of  superannuation  in  per- 
centage of  his  average  salary  would  be  fifty-two; 
and  if  he  has  completed  fifty  years  of  contribution,' 
such  amount  would  be  eighty-three,  etc.   It  is  als^ 
provided  that  if  a  member  continues  to  work  after 
sixty,  his  pension  shaU  be  increased  by  if  per  cent 
of  every  completed  year  of  deferred  retirement  to 
age  sixty-five.    The  report  of  the  Management  Com- 
mittee for  the  year  igio  shows  1145  pensioners  on 
the  roll,  whose  annuities  for  that  year  amounted  to 
£21,813.    The  total  amount  of  superannuation  bene- 
fits paid  from  1880  to  1910  is  £158,233  (appro.ximateIy 
«79i,i6s).   It  may  be  remarked  that  this  society 
complies  with  the  law  requiring  quinquennial  valua- 
tions; and  the  latest  balance  sheet  received,  as  of 
December  31,  1905,  computed  with  interest  assump- 
tion of  3J  per  cent,  and  taking  into  account  the  rail- 
way company's  grant  of  twelve  shillings  sixpence  per 
year  per  member,  shows  that  the  society  is  abso- 
lutely solvent. 

The  Great  Eastern  Railway,  according  to  advices 
from  the  general  manager,  under  date  of  March  10, 

191 1,  conducts  three  retirement  systems:  a  superan- 
nuation fund  opened  to  salaried  (i.e.  clerical)  staff 
and  officers,  including  station  masters,  with  retire- 
ment optional  at  sixty  years  of  age;  a  pension  fund 


TRANSPORTATION  COMPANIES  125 

open  to  wages  staflf ;  and  a  pension  supplemental  fund 
wuh  retirement  optional  in  both  these  latter  funds  at 
sixty-five  years  of  age.   Membership  in  the  first- 
named  fund  is  compulsory,  but  not  in  the  case  of  the 
other  two  funds.    The  funds  were  voluntarily  estab- 
I'shcd  by  the  company  and  their  benefits  are  assured 
to  the  members  under  the  company's  guarantee.  The 
Secretary  of  the  Managing  Committee  reports  the 
number  of  pensioners  in  the  three  funds,  on  December 
3i»  1910,  as  follows :  — 


Undm  6s 
Yeabs  or 

AOE 

OVM  6s 

Yeass  or 
Age 

Total 

Superannuation  Fund  since  1879 

Pension  Fund  since  1891 
Pension    Supplemental  Fund 
since  1895  . 

301 

102 

143 

238 
251 

301 
340 

394 

Totals  . 

546 

489 

103s 

..w.       umwmg  annuities  at  the  close 

ot  the  year  1910. 

That  the  En,h-sh  railways  build  their  pension  sys- 
tems on  scientific  bases  is  further  shown  in  the  foUow- 
mg  synopsis  of  a  report  from  the  Great  Central 
Railway,  through  its  general  manager,  under  date  of 
March  28,  19x1:  The  company  were  members  of  the 
Railway  Clearing  House  Superamiuation  Fund  es- 


126    OLD  AGE  DEPENDENCY  m  THE  UNITED  STATES 

tabHshed  in  1874;  but  on  October  i,  1905,  established 
their  own  fund  on  the  basis     an  Act  of  Parliament, 
at  which  time  the  moneys  standing  to  the  credit  of 
the  company  and  its  staff  in  the  RaUway  Clearing 
House  Fund  were  transferred  to  the  company's  own 
fund.   The  pension  system  includes  officers,  clerks  and 
other  servants  engaged  by  the  month  or  longer,  in 
contradistinction  to  those  engaged  by  the  week. 
Membership  is  compulsory  on  those  joining  the  serv- 
ice up  to  forty  years  of  age  (those  over  that  age  not 
being  eligible) ;  and  each  member  contributes  to  the 
fund  a  sum  equal  to  2]  per  cent  of  his  salary.   If  his 
salary  be  reduced,  he  is  still  entitled  to  continue  his 
contributions  on  the  higher  basis  and  receive  benefits 
accordingly.    Retirement  is  optional  at  age  sixty  and 
compulsory  at  sixty-five.    A  member  must  contribute 
for  a  period  of  at  least  ten  years  before  being  entitled 
to  a  superannuation  allowance.    Contributions  made 
for  five  or  less  than  ten  years  will  be  returned,  with- 
out interest,  if  an  employee  retires  from  the  service. 
The  managing  committee  also  has  the  discretion  to 
return  to  a  retiring  mem  >er  his  contributions  for  less 
than  five  years.   The  n  nimum  pension  aUowance  is 
five  shillings,  and  the  maximum,  fifteen  shillings  per 
week;  the  basis  being  to  divide  the  annual  weekly 
wages  for  the  last  ten  years  of  service  into  a  given 
number  of  parts,  as  follows :  — 


TKANSPOMAnON  COMPANIES 


X27 


"If  60  years  of  age,  average  weekly  wages  for  the 
last  ten  years  divided  into  


61  years  of  age 

62  years  of  age 

63  years  of  age 

64  years  of  age 

65  years  of  age 


6q  parts 
68  parts 
67  parts 
66  parts 
65  parts 


and  the  result  multiplied  by  the  number  of  years' 
service,  and  divided  by  two,  gives  the  amount  of  the 
allowance  to  be  granted."   "These  allowances  are 
granted  only  to  employees  who  have  attained  the 
age  ot  sixt>-  years  and  ox  cr  and  who  have  had  twenty- 
five  years'  permanent  and  c(HUinuous  service  with  the 
company.    They  are  terminable  at  the  pleasure  of 
the  directors  of  the  company ;  and  are  only  paid  until 
such  time  as  the  recipient  attains  the  age  of  seventy 
years,  when  he  becomes  eligible  for  an  old-age  pension 
under  the  provisions  of  the  Government  scheme." 
On  this  1903  plan,  retiring  allowances  are  borne 
entirely  by  the  company;  and  it  would  seem,  there- 
fore, that  there  are  really  two  systems  in  operation- 
first,  the  contributory,  providing  for  an  annual 
pension  of  not  less  than  £30  and  computed  on  the 
average  salary  basis,  as  above  described  (in  which 
case,  £60  per  annum  is  reckoned  as  the  mimmum 
salary  received) ;  and  the  non-contributory,  with  a 
mmimum  allowance  of  five  shillings  and  a  maximum 
of  fiftcca  shiiliiigs  per  week. 


128    OLD  ACE  DEPENDENCY  IN  THE  UNITED  STATES 

The  London  and  Northwestern  Railway  ilso  has 
an  elaborate  pension  system,  of  which  an  -inalvsis  is 
not  deemed  necessary,  in  view  of  the  fact  that  it 
largely  corresponds  with  that  of  the  other  English 
systems  already  noted. 

From  this  cursory  glance  at  English  railway  pension 
schemes,  it  would  seem  that  the  American  plans,  as  a 
rule,  are  far  more  simple  and  more  generally  based 
on  the  recognition  of  the  principle  that  old-age  pen- 
sions are  in  the  nature  of  a  dividend  of  capital's  profits 
with  labor ;  or  deferred  wage  dividends  available  at 
the  time  of  greatest  need. 

B.  Electric  Lines 

The  information  concerning  pension  for  employees 
of  electric  lines  is  not  xcry  extensive,  hut  is  pre- 
sented largely  as  an  illustration  of  the  ever-widening 
concentric  growth  of  the  pension  idea. 

The  Boston  Elevated  Railway  Company  seems  to 
have  been  a  pioneer  among  "electrics,"  as  the  follow- 
ing quotation  from  its  General  Order  Number  375, 
dated  January  19,  1903,  shows:  "Support  of  Blue- 
uniformed  Employees :  It  is  also  the  intention  of  the 
Company,  in  the  case  of  a  blue-uniformed  employee, 
who,  in  the  judgment  of  the  management,  is  unfit 
to  perform  any  duty  in  the  service  of  the  Company 
and  who  has  been  continuously  employed  by  the 


TJiAXSPORTATIC\-  COMPANIES  j^g 

Company  for  a  period  of  twenty-five  years,  or  who  has 
roac  c.d  the  ,,c  of  sixty  years  and  has  been  contin- 
uously employed  by  the  Company  for  a  period  of 
"f^«n  years,  to  contribute  to  the  support  of  such 
cmplo>ee  a  sum  not  exceeding  twenty-five  dollars 
per  month  durinj,  the  rest  of  his  life-time."  The 
secretary  of  the  company,  in  a  letter  dated  April  6 
X9II,  states:   "This  intention  has  been  carried  out^ 
but  m  each  individual  case,  the  treatn.ent  is  difTerent' 
as  you  will  notice;  the  employee  is  ..st  Judged  'unfi; 
to  perform  any  duty'  before  he  is  eligible  for  a  pen- 
non.  But  in  many  cases,  they  are  found  light  work 
to  do  while  under  the  pension,  if  they  are  not  entirely 
mcapaatated;  and  if  the  class  of  work  entitles  them 
to  more  than  twenty-five  dollars  per  month,  they  are 
pa  Id  the  difference  in  excess  of  that  sum  " 

The  Denver  City  Tramway  Company  operates  a 
pension  department  as  a  part  of  its  Mutual  Aid 
Association,  which  association  is  composed  of  the 
emplo>-ees  of  the  company  who,  for  the  purpose  of 
determn^mg  benefits  and  contributions,  are  divided 
-to    three    classes:    First,  all    members  whose 
monthly  earnmgs  are  eighty  dollars  or  over;  second 
aU  members  .hose  monthly  earnings  are  at  least 
s«ty  dollars   and   less    than"  eighty;    third,  aU 
members  whose  monthly  earnings  are  less  than  sixty 
dollars.    The  contribuuons  are  monthly,  as  follows : 


130    OLD  AOE  DEPENDENCY  IN  THE  UNITED  STATES 

First  class,  one   dollar;   second   class,  seventy- 
five  cents;  third  class,  fifty  cents.    These  con- 
tributions provide  for  sickne^,  accident  and  death 
benefits,  as  well  a^  pennons.  In  order  to  enable  the 
association  to  carry  out  its  plans  effectually,  the 
Tramway  Company  has  entered  into  an  agreement 
with  the  Mutual  Aid  Association,  under  which  it 
pays  into  the  treasury  of  the  nssociation  montiily 
an  amount  equal  to  one-fourth  of  the  total  conlril)U- 
tions  of  the  members  for  tlie  month ;  ;ind  also  agrees 
to  make  up   any  deikiencies,  provided    that  its 
advances  on  this  account  shall  be  repaid  from  future 
contributions.    The  age  of  retirement  on  pension  is 
ilxed  at  seventy  years,  compulsory,  and  sixty-five 
for  incapacity,  provided  the  employee  has  been  for 
twenty-five  years  or  more  in  the  active  service  of  the 
company;  except  that  fifteen  years'  service  will  be 
accepted  as  the  minimum  required  in  certain  cases. 
The  pension  allowance  is  fixed  at  twenty-five  dollars 
per  month  for  employees  in  the  first  class;  twenty 
dollars  for  those  in  the  second;  and  fifteen  dollars 
for  those  in  the  third.   It  is  also  stipulated  that,  when 
the  pensions  exceed  an  aggregate  of  eighteen  thousand 
dollars  per  annum,  a  new  basis  of  computation  shall 
be   established.    The  vice   pre'^ident   and  general 
manager  of   the  company  writes,  under  date  of 
September  8,  191 1,  that,  during  the  past  seven  years, 


TRANSPOlTAnON  COMPANIES  131 

seven  employees  have  been  retir.d ;  and  that  the 
pension  roll  now  amounts  to  a  total  of  one  hundred 
and  forty.five  dollars  per  month. 

The  Omaha  RaUway  Employees'  Benefit  Associa- 
tion contains  the  following  stipulation  among  its 
rules:  "Members  of  this  Association  who  shall  here- 
after be  placed  by  the  Pension  Board  of  the  Chicago, 
St.  Paul,  Minneapolis  and  Omaha  Railway  Com- 
panv-  upon  the  pension  rolls  of  said  company,  shaU 
therebv-  become  enUUed  to  receive  thereafter  from  this 
Association  a  su|)i)[emental  pension  aUowance  equal  in 
amou.         ne-half  the  pension  allowance  granted  by 
said  company ;  provided,  however,  that  no  such  supple- 
mental pension  allowance  to  be  paid  by  this  Associa- 
tion shall  be  based,  in  whole  or  in  part,  upon  a  rate 
of  salary  ur  wa^es  exceeding  two  hundred  dollars  per 
month."   It  would  seem  that  this  is  the  only  pension 
provision  in  connection  with  this  service. 

The  Brooklyn  Rapid  Transit  S>-stem  placed  in 
operation  a  pension  plan  on  December  14,  iqoq,  under 
which  the  pension  "ranges  from  fifty  per  cent  of  the 
average  monthly  wage  during  the  ten  years  preceding 
retirement  of  those  who  have  served  continuously  for 
thirty-five  or  more  years  to  30  per  cent  of  the  aver- 
age  ten  years'  wage  for  those  who  have  served  con- 
tinuously for  less  than  thirty  years  and  more  than 
thirty-five  years.   Under  this  arrangement,  many 


132     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

employees,  upon  retirement,  will  receive  an  income 
equivalent  to  4  per  cent  per  annum  upon  an  invest- 
ment of  ten  thousand  dollars."  It  is  made  obligatory 
that  every  employee  to  become  eligible  for  a  pension 
must  belong  to  the  Employees'  Benefit  Associa- 
tion and  maintain  his  membership  therein  contin- 
uously to  the  time  of  retirement.  The  retiring  age 
is  fixed  at  seventy  for  service,  and  from  sixty-five  to 
sixty-nine  for  incapacity,  though  an  employee  may 
be  retired  and  pensioned  under  sixty-five  years  of 
age  if  incapacitated  and  after  a  service  of  at  least 
thirty  years.  It  is,  however,  provided  that  pensions 
shall  not  be  available  for  employees  who  have  for  a 
period  of  five  years  or  more  before  retirement  been 
receiving  in  excess  of  fifteen  hundred  dollars  per 
aimum. 

The  Philadelphia  Rapid  Transit  Company  adopted 
a  pension  system  for  its  employees,  effective  on  De- 
cember 31,  1909,  by  which  each  employee  on  reaching 
the  age  of  sixty-five,  after  twenty-five  years  of  con- 
tinuous service  in  the  company,  is  entitled  to  retire 
on  a  pension  of  twenty  dollars  per  month.  Such 
retirement  is  voluntary ;  but  the  company  reserves 
the  right  to  make  compulsory  retirements  on  pension 
"in  the  case  of  employees  who  arc  so  infirm  as  to 
be  unable  properly  to  perform  their  duties." 

The  following  street  railway  companies  at  New 


TKANSPORTAHON  COUPANIES  133 

Bedford,  Massachusetts,  namely,  Union  Street  Rail- 
way Company,  Dartmouth  and  Westport  Street  Rail- 
way Company,  the  New  Bedford  and  Onset  Street 
Railway  Company,  instituted  on  April  28,  1910, 
a  joint  pension  department  under  the  direction  of  a 
pension  board  representing  the  individual  boards  of 
directors.   Under  the  rules  of  this  department,  any 
oflBcer  or  employee,  except  executive  officers,  must  be 
retired  on  reaching  the  age  of  seventy  years,  and  if 
he  has  been,  for  twenty  consecutive  years  preceding 
his  retirement,  in  the  active  scr\ice  of  the  company, 
he  may  be  pensioned  on  the  following  basis:  "For 
each  year  of  consecutive  service,  i  per  cent  of  the 
average  monthly  pay  actually  earned  by  the  employee 
during  the  ten  years  next  preceding  retirement,  except 
that  no  pension  allowance  shall  be  less  than  twenty 
dollars  per  month  nor  more  than  one  hundred  dollars 
a  month."   For  disability,  any  officer  or  employee 
may  be  retired  and  pensioned  between  the  ages  of 
sixty  and  sixty-nine.   If  he  has  been  in  the  company's 
employment  for  twenty  years  consecutively  next, 
preceding  his  retirement,  his  pension  is  calculated 
upon  the  same  basis  as  that  for  service  retirment.  It 
is  also  provided  that,  in  case  of  disabiHty  prior  to 
age  skty  or  in  case  the  term  of  service  has  been  less 
than  twenty  years,  the  board  may  grant  a  special 
pension ;  also,  that  pension  allowances  may  be  con- 


134     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

tinued  to  widows  or  orphans  of  pensioners  for  a  fixed 
period  of  time,  at  the  discretion  of  the  board. 

The  Public  Service  Corporation  of  New  Jersey 
announced,  under  date  of  December  28,  1910,  that  it 

had  adopted  a  pension  plan  for  the  carmen  of  the 
city  of  Camden,  under  which  employees  retiring  at 
sixty-five,  after  having  been  in  the  service  of  the  com- 
pany for  twenty-five  years,  would  receive  a  pension 
of  not  less  than  two  hundred  and  forty  dollars  a  year. 

The  West  Penn  Railways  Company,  on  January  i, 
19.0,  put  into  operation  a  system  of  death  benefits 
ranging  from  one  hundred  dollars  for  an  employee 
dying  during  the  first  year  of  his  service  to  five  hundred 
doUara  for  those  who  have  been  in  the  service  for 
five  years  or  more.  A  system  of  superannuation 
benefits  is  also  provided  for  those  who  retire  after 
ten  years'  consecutive  service  in  the  company,  which 
is  really  the  five-hundred-dollar  death  benefit  com- 
muted into  monthly  payments;  that  is  to  say,  an 
employee,  whose  beneficiary  would  be  entitled  to  five 
hundred  dollars  on  his  death,  will  be  paid  eight  dollars 
and  thirty-three  cents  per  month  on  his  retirement, 
until  he  has  drawn  the  total  sum  of  five  hundred 
dollars  as  retirement  benefits.    In  case  the  death  of  a 
superannuated  emplo\-ce  takes  place  before  he  has 
drawn  the  full  amount  of  five  hundred  dollars,  the 
residue  will  be  paid  to  his  beneficiaries.    In  a  letter 


TRANSPORTATION  COMPANIES  135 

dated  March  24,  1911,  the  secretary  of  the  company 
states:  "It  is  the  hope  of  our  officers  to  be  able  to 
double  the  amount  of  payments  in  the  death  benefit 
schedule;  so  that  the  final  amount  will  be  one  thou- 
sand dollars,  and  the  superannuation  payments  be 
increased  accordingly." 

The  United  Traction  and  Electric  Company  of 
Providence,  Rhode  Island,  which  practically  controls 
all  of  the  trolley  lines  in  the  state,  outside  of  Newport, 
operates  a  non-contributory  pension  scheme  avail- 
able to  all  employees  upon  their  attaining  the  age  of 
seventy,  on  Jie  following  scale  of  per  cents  of  salaries 
at  time  of  retirement  for  each  year  of  service :  — 

Service  for  10  years  and  less  than  20  ,  ^ 

Service  for  20  years  but  less  than  25  

Service  for  25  years  but  less  than  30  

Service  for  30  years  but  less  than  35  ,|% 

Service  for  35  years  or  longer  ,  ^ 

This  pension  scheme  is  the  supplement  of  a  mutual 
insurance  fund  to  which  employees  contribute  and 
from  which  they  receive  benefits  according  to  the 

following  schedule :  — 


Employees 

Weekiy 

Wages 

Weeexv 

CONTRI- 

Bf  I  IONS  j 

Death 

Weekly  Do- 

ABIUTY  Al- 
LOWANdS 

I  'irst  class  .  .  . 
Second  class  .  . 
Third  class  .   .  . 

to  $  8.00 
$8  to  $  120 
Over  $120 

$  .10  1 

.20  i 

1 

•  500.00 

750.00 
1000.00 

$400 

fi.oo 

8.00 

136     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

The  company  is  required,  by  its  contractual  relation 
to  this  mutual  insurance  fund,  to  make  good  any  defi- 
ciencies, owing  to  extra  demands  on  the  fund,  above 

the  regular  contributions  of  the  employees,  according 
to  the  above  schedule  and  the  supplemental  contri- 
butions of  the  company.  The  operation  of  this  plan 
provides  that  if  an  employee  is  disabled  while  in  the 
service  of  the  company,  he  receives  a  weekly  allow- 
ance for  invalidity  until  he  reaches  the  age  of  seventy, 
when  such  allowance  stops,  and  he  become^  a  bene- 
ficiary of  the  pension  fund,  operated  gratuitously  by 
the  company  for  employees  retired  by  reason  of  the 
age  limit.  This  plan  was  devised  by  an  actuary  of 
high  standing  and  will  evidently  serve  as  a  model  for 
other  companies  seeking  to  formulate  a  reliable  and 
equitable  pension  scheme. 

There  are,  perhaps,  other  electric  lines  within  the 
country  in  which  superannuation  benefits  are  provided 
for  in  some  form  or  other.  The  above-given  analysis 
shows  a  commendable  tendency  ji  this  direction. 

C.  Steamship  Companies 
In  view  of  the  fact  that  the  merchant  marine  of  the 
United  States  is  largely  controlled  by  the  railroads, 

what  has  already  been  said  concerning  pensions  for 
railroad  employees  is  generally  descriptive  of  those 
for  steamship  employees.   For  instance,  the  New  York, 


TRANSPORTATION  COMPANIES  137 

New  Haven  and  Hartford  Railroad  Company  extends 
its  retirement  pension  system  so  as  to  include  the 
employees  of  the  New  England  Navigation  Company. 
The  Southern  Pacific  extends  its  pension  system  so  as 
to  include  the  employees  on  its  Atlantic  Steamship 
Lines  and  the  Pacitk  Mail  Steamship  Company. 

The  Old  Dominion  Steamship  Company,  on  De- 
cember 31,  1902,  announced  its  purpose  of  retiring 
employees  of  every  description  "who,  in  the  opinion 
of  the  board  of  directors,  shall  have  served  the  com- 
pany faithfully  for  a  period  of  not  less  than  twenty- 
five  years  and  shall  have  reached  the  age  of  seventy 
years  or  shall  have  been  retired  after  reaching  the 
age  of  sixty-two  years  because  of  incapacity.  The 
decision  of  the  board  as  to  the  eligibility  of  any  em- 
ployee in  respect  to  the  term  and  faithfubiess  of  his 
service  shaU  be  final.  The  adoption  of  this  system 
shall  not  aflfect  the  right  of  the  company  to  discharge 
any  employee  who  for  any  reason,  physical,  mental, 
moral,  or  otherwise,  shall  be  unsatisfactory.  .  .  . 
Retired  employees  shall  be  held  to  be  no  longer  in  the 
employment  of  the  company  and  shall  be  at  Uberty 
to  engage  in  other  occupations.  ...  It  is  intended 
that  retired  employees  shall  receive  annual  aUowances 
at  the  rate  of  i  per  cent  for  each  year  of  their  service 
in  the  company,  computed  upon  the  average  annual 
amount  of  their  pay  or  salary  during  the  last  ten  years 


I' 

:  I- 


Iff  3 

hi 


a 


138    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

of  th:;r   ervir,;  provided,  however,  that  the  com- 
pany's eu.-.o  ovpeaditures  for  retiring  allowances 
in  any  one  year  shall  never  exceed  i  per  cent  of  the 
total  pay  roll  for  that  year ;  and  if  such  i  per  cent  shall 
not  be  sutricient  to  pay  in  full  the  retiring  allowances 
for  that  year,  all  such  allowances  shall  be  ratably 
abated.   It  is  provided  further  and  must  be  under- 
stood by  the  employees  of  this  company  that  the 
contmuance  of  the  scheme  of  retiring  allowances  now 
provided  for  depends  upon  the  earnings  of  the  com- 
pany; and  may,  in  unfavorable  business  years,  be 
suspended  or  may  be  at  any  time  discontinued  at  the 
option  of  the  board  of  directors.   AU  allowances 
granted  pursuant  to  this  plan  shall  be  absolutely 
unassignable  in  whole  or  in  part  and  shaD  cease  with 
the  death  of  the  recipient." 

This  completes  the  survey  of  efforts  at  relief  of  old 
age  dependency  among  transportation  companies  in 
America  so  far  as  the  data  have  been  furnished  in 
response  to  oft-repeated  requests  made  practically 
of  all  such  companies  operating  under  charters  granted 
in  the  United  States.    It  is  regrettable  that  only  a  few 
more  than  a  score  of  the  many  hundreds  in  operation 
report  the  adoption  of  any  plans  whatever  for  the  re- 
hef  of  worn-out  and  aged  employees,  whose  faithful  and 
long-continued  service  has  contributed  to  the  great 
wealth  and  efficiency  of  American  transportation  lines 


CHAPTER  V 


Teachers'  Retirement  Funds 

It  seems  remarkable  that  the  United  States,  which 
has  led  the  world  in  compulsory  education  at  public 
expense,  should  be  far  behind  other  countries  in  making 
provision  in  law  for  the  support  of  worn-out  and  aged 
teachers.   Russia  established  such  laws  in  1819; 
Saxony,  in  1840;  England,  in  1848;  France,  in  1858.' 
Other  countries  in  which  such  laws  prevail  are  Ire- 
land, Spain,  Servia,  Italy,  Austria,  Belgium,  Sweden, 
Norway,  Finland,  Australia,  Japan,  Mexico,  Chile, 
Argentine  Repubhc,  Ontario,  Quebec,  and  nearly  aU 
the  cantons  of  Switzerland. 

Some  of  these  retirement  laws  are  exceptionally 
liberal;  for  example,  in  the  Argentine  Repubhc,  the 
law,  enacted  some  ten  years  before  the  first  law  on  this 
subject  in  the  United  States,  provides  for  the  retire- 
ment of  any  member  of  the  teaching  force  entirely 
at  the  expense  of  the  government,  on  full  salary,  after 
twenty  successive  years  of  service ;  and  three-fourth's 
salary  after  fifteen  continuous  years  of  service,  if 
then  incapacitated  or  if  position  then  becomes  abol- 

139 


I40    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

isheci  Under  this  law.  a  teacher  may  be  retired  on 
full  salary,  whatever  the  length  of  service,  who  has 
become  disabled  "on  account  of  a  heroic  act  per- 
formed pro  bono  publico  or  through  endangering  Ufa 
in  tr>-ing  to  save  a  fellow  creature  from  death,  or  in  a 
struggle  fought  in  the  exercise  of  his  office,  or  through 
any  accident  undoubtedly  occurring  while  in  the 
performance  of  his  duties." 

Like  every  other  altruistic  movement  in  this  coun- 
try, the  effort  to  secure  pennon  legislation  on  behalf 
of  teachers  has  made  slow  progrefes.   The  first  sys- 
tematic effort,  so  far  as  the  records  show,  was  made  by 
the  teachers  of  the  dty  of  Brooklyn  in  1878.  BiUs 
were  introduced  into  the  New  York  legislature  on 
their  behalf  in  1879  and  1881,  but  failed  to  become 
laws.   New  York  City  secured  the  passage  of  a  law 
in  1894,  and  Brooklyn  in  1895.    From  this  successful 
start,  the  movement  has  spread  quite  generaUy  over 
the  country,  but,  as  yet,  is  abiost  entirely  confined 
to  the  larger  cities,  which  are  made,  either  by  name  or 
by  the  wording  of  the  law,  the  only  part  of  the  state 
to  which  teachers'  pension  laws  apply. 
^The  following  summary  of  teachers'  pension  pro- 
visions by  states  and  cities  within  the  states  presents 
the  situation  regarding  the  teachers'  pension  movement 
in  this  country  as  it  exists  at  the  close  of  the  year 
1911. 


TEACB2KS'  SETIltElIENT  FUNDS  141 

Alabama 

No  law  on  the  subject  has  been  enacted  by  the 
legislature ;  and  no  pension  system  has  been  put  into 
operation  in  any  city  or  other  part  of  tiie  state, 
although  there  was  some  agitation  along  this  line  in 
the  early  part  of  the  year  191 1. 

Arizona 

No  law  has  been  enacted  either  for  the  territory 
or  for  any  dty  or  section  thereof. 

Arkansas 

The  same  situation  obtains  as  in  Arizona. 
California 

The  Teachers'  Retirement  Fund  BiU  was  successful 
in  the  legislature  in  the  early  part  of  191 1,  but  was 
not  approved  by  the  governor. 

Colorado 

Law  of  1909  applicable  to  the  city  of  Denver. 
Management :  Board  of  education.  Fund :  Created 
by  a  levy  of  not  to  exceed  one-tenth  of  a  mill  on  prop- 
erty taxable  for  school  purposes.  The  present  levy 
for  teachers'  retirement  fund  is  one-twentieth  of  a 
null;  and  has  brought  into  the  fund  $6500.  Bene- 
ficiaries: Any  teacher  who  has  served  at  least  ten 
years  may  be  voluntarily  retired  on  satisfactory 


142    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

evidence  of  permanent  incapacity;  any  teacher  who 
has  served  at  least  ten  years  and  is  compulsorily 
retired  on  the  recommendation  of  the  superintendent 
of  city  schools.   Pensions:  Thirty  dollars  per  month. 
The  superintendent  of  the  Denver  dty  schools,  in 
his  seventh  annual  report,  for  1909  and  1910,  re- 
marks : '  "I  feel  convinced  that  this  Retirement  Fund 
is  going  to  result  in  benefit  to  the  schools  in  two 
ways:  First,  those  now  teaching  feel  more  contented 
because  there  is  the  assurance  of  a  reasonable  return 
after  the  days  of  acUve  service  have  been  completed; 
second,  those  whose  efficiency  has  become  impaired 
on  account  of  age  can  be  retired  without  injury  to  the 
individual  and  make  possible  the  substitution  of  more 
efficient  teachers.   It  is  to  be  hoped  that  sometime 
in  the  near  future  the  Board  of  Education  will  see  its 
way  clear  to  mcrease  the  monthly  payment  to  those 
on  the  retired  list,  from  $30  to  $40."   There  were, 
at  the  beginning  of  1911,  eight  teachers  drawing  pen- 
sions, -  twoonaccountofillhealthandsixonaccount 
of  length  of  service. 

Connecticut 

The  legislature  of  the  state  enacted  a  law  during 
the  summer  of  1911,  under  which  a  teachers'  retire- 

« Seventh  Annual  Report  of  School  District  No.  i.  in  the  City  and 
County  of  Denver,  Colorado,  pages  31  and  22. 


TEACBEKS'  RETnuOffiNT  FUNDS  143 

ment  fund  is  established  for  the  cit}  of  New  Haven. 
Management:    The   board   of   education.  Fund: 
ContribuUons  of  teachers,  -  i  per  cent  of  annual 
salary  for  aU  those  m  the  service  ten  years  or  less  and 
2  per  cent  for  those  more  than  ten  years.    The  board 
of  education  appropriates,  at  the  close  of  each  fiscal 
year,  enough  money  to  make  up  the  difference  between 
receipts  and  the  actual  amount  spent  during  the  year 
in  pensions.  Beneficiaries:  Any  teacher  who  has 
taught  for  at  least  thirty  years,  twenty  of  which  were 
in  the  public  schools  of  New  Haven.  Such  teacher 
may  apply  for  retirement  on  reaching  sixty-five  years 
of  age.   Any  teacher  who  has  taught  for  fifteen  years, 
the  last  ten  of  which  have  been  in  the  pubUc  schools 
of  the  city,  may  be  retired  for  incapacity.  Pension: 
One-half  of  the  annual  salary  on  retirement,  to  be  not 
less  than  four  hundred  dollars,  however,  nor  more  than 
eight  hundred  dollars  a  year. 


Delaware 

No  uiformation  at  hand. 

District  of  Columbia 
A  movement  was  made  early  in  the  year  191 1  to 
secure  the  passage  of  a  teachers'  retirement  fund  for 
the  city  of  Washington.   Several  facts  were  adduced 
in  support  of  the  measure.   It  was  said  that  for  twenty 


144    OU)  ACE  DSPENI^CY  IN  THE  UNITED  STATES 


years  prior  to  .906,  the  average  an-aal  salary  of 
District  public  school  teachers  had  b  .  n  burely  six 
hundred  and  seventy  dollars.   After  i  lot),  the  u vi  ago 
was  about  seven  hundred  dollars ;  and  now,  includin 
lagjti  school  principals  and  heads  of  departments,  it 
is  nine  hundred  and  olc\  en  dollars.    Cctnceming  thi^ 
low  remuneration,  a  iiongressman  remark  '!  that  e 
policemc!^    'cn^  paid  more  tu  rrack  *  he  r  uUs  < 
children  i    Washington  than     •  ten         vcre  p-i 
for  puttin  '  son;    ain^,  into  tlici      1      tru  i  of  thi 
statement  is  i  vidcnced  by  the  f:i  ■  th  t     0      w  f  no 
of  the  Dis'acl  hi^h  school  teachc  j  sai. 

salary  as  iie  usiistant  janitor  of  I  miui; 

Fhrida 

No  action  has  been  taken,  at  t  hough  \  ,  ■  subject  as 
been  agitated. 

Georgia 

There  is  no  state  la  proMding  for  teac  len- 
sions.  The  .-unerinte  ient  .J  schools  nta 
reports  that  thi  ire  two  h  rs  in  '  di  v  tieveti 
of  duty,  but  kc  on  )a:  '  cat  of  tl.ar  long 
connection  with  he 

/,. 

Then- are  10  vs  providin.^  fo'  ;  ache  lons. 
The  sup-:rinteadi  t  J  public  instruction  in  Soise 


TEACHEKS'  RETISEIISNT  FUNDS  145 

rtniarks:    '-Our  Stale  is  young  ami  im  st  of  th 
teachers     -.c  young....    There   should     <•  su.  ii 
laws  for  th(  proiection  of  oui-  teachers  in  the  futun  ' 

lUinois 

The  state  gislature  passed  a  law  May  ii,  1907, 
authorizing  the  establishment  and  support  of  a 
teachers'  pension  fund  for  the  dty  of  Chicago. 
Management :  A  ird  of  trustees,  consisting  of  nine 
nu-  Ts  chosen  L.  the  board  of  ed«:ati>u.  Funds: 
Cr  d  by  interest  on*public  school  i^amys;  not 
to  I  LC'l  in  iny  one  year  i  per  cent  of  the  school 
levies,  ;uid  ;  H  •  i.uys  received  frt<m  donations,  lega- 
<  ic's.  frifts.  or  be(,  -,ts;  also,  five  dollars  per  annum 
deducted  fron  th'  i!  ry  of  teachers  -"h,,  ha  taught 
hvc  \-ears  or  ten  dollars  pc-     .num  from  the 

salary  of  tho.^  .ye  taught    ve  years  and  not 

more  than  ten  ,  ollars  per  annum  uf  1  he  salary 

of  those  who  have  t  ten  years  and  not  more  than 

fifteen;  and  thirt\  aoilars  per  annum  of  those  who 
have  taught  more  than  fifteen  years,  provided  that 
if  any  teacher  has  withdrawn  from  the  force  prior 
to  the  establishment  of  the  fund,  he  might  become 
eligible  to  benefits  by  payin-  into  the  fund  all  arrear- 
ages, with  4  per  cent  interest,  and  thereafter  contribute 
according  to  the  above  schedule.  Beneficiaries :  Any 
person  who  has  taught  in  the  public  schools  for  twenty- 


146    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STA'ES 

five  years ;  any  person  who  has  taught  for  fifteen  years 
and  is  relieved  of  duty  because  of  permanent  dis- 
ability.  Pensions :  Four  hundred  dollars  a  year,  or 
such  proportion  thereof  as  the  amount  contributed 
by  the  teacher  bears  to  the  total  amount  he  should 
have  contributed  under  the  rules.    Under  this  head, 
it  is  pro\-ided  tliat  each  teacher  shall  have  paid  an 
aggregate  of  four  hundred  and  fifiy  dollars  in  order 
to  become  entitled  to  a  pension;  also  that  any  teacher 
contributing  to  the  fund  shall  not  be  discharged,  except 
for  cause  upon  written  charges.    Any  teacher  retir- 
ing voluntarily  shall  receive  a  refund  of  one-half  of 
the  money  he  has  contributed  to  the  fund.  It 
also  provided  in  the  law  that  all  pensions  shall  be 
exempt  from  attachment  or  garnishment. 

Indiana 

Law  passed  by  the  General  Assembly  in  March, 
1907,  applicable  to  the  city  of  Indianapolis  only. 
Management :  A  board  of  trustees  composed  of  three 
members  of  the  board  of  school  commissioners  elected 
annually,  superintendent  of  pubHc  schools,  one 
princii)al  and  two  teachers.  Fund:  Gifts  and  be- 
quests and  I  per  cent  per  annum  of  the  salary  of 
teachers  who  have  taught  imt  in  excess  of  fifteen  years, 
but  not  more  than  ten  dollars  per  annum ;  2  per  cent, 
but  not  to  exceed  twenty  dollars,  of  the  annual  salary 


TEACHEKS'  RETIKEMENT  FUNDS  147 

Of  teachers  who  have  taught  longer  than  fifteen  years, 
provided  such  salaries  shall  amount  to  four  hundred 
and  fifty  dollars  per  year  or  more.   Beneficiaries :  Any 
teacher  who  has  teught  forty  years,  or  any  teacher  in- 
capadtated  after  fifteen  years'  service,  or  any  teacher 
retired  by  action  of  the  board  after  twenty-five  years. 
Pensions :  Six  hundred  dollars  per  year  or  such  pro- 
portion thereof  as  the  number  of  years  taught  bears 
to  forty.    It  is  also  provided  that  if  a  teacher  retires 
from  the  service,  he  shall  be  entitled  to  the  return  of 
one-half  of  the  amount  he  has  paid  in,  without  in- 
terest.   In  case  of  death,  one-half  of  the  teacher's 
contributions,  without  interest,  shall  be  paid  to  his 
heirs  or  estate.    It  is  also  provided  that,  in  case  the 
fund  is  not  sufficient  to  pay  a'l  pensions  in  full,  they 
shaU  bo  prorated  accordingly;  and  also  that  pensions 
shall  be  exempt  from  attachment  or  execution.  The 
determined  effort  to  secure  the  passage  of  a  state-wide 
teachers'  pension  act,  during  the  legislative  season 
of  1910-1911,  failed  because  the  teachers  would  not 
consent  to  the  striking  out  of  the  biU  a  state  aid  pro- 
vision. 


Iowa 


No  law  has  been  enacted  on  the  subject,  although 
strenuous  efforts  were  made  in  the  early  part  of  1911 
to  have  such  legislaUon  enacted,  leading  educators 


148     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

of  the  state  believing  that  they  had  drafted  a  model 
pension  bill,  which,  however,  failed  of  passage. 

Kansas 

The  legislature  enacted  a  teachers'  retirement  fund 
law  in  191 1  for  cities  of  the  first  class.  Manage- 
ment :  Boards  of  t'ducation.  Fund :  Voluntary 
contributions  from  teachers  who  expect  to  be  bene- 
ficiaries :  not  less  than  i  pc  cent  nor  more  than  lo  per 
cent  of  every  instalment  ol  salary ;  the  setting  aside 
from  the  general  fund  lor  the  support  of  the  schools 
in  said  dty  an  amount  not  less  than  one  and  one-half 
times  the  amount  of  teachers*  contributions  and  not 
less  than  the  amoimt  necessary  to  meet  the  payments 
on  accoimt  of  retirement;  gifts,  devises,  etc.  Bene- 
ficiaries :  Any  teacher  who  has  been  in  the  service  for 
thirty  years,  fifteen  of  which  must  have  been  in  the 
dty  schools ;  any  teacher  who  has  been  twenty-five 
years  in  the  service,  fifteen  of  which  were  in  the  dty 
schools,  may  be  retired  for  incapacity.  Pensions: 
Five  hundred  dollars  per  year,  provided  the  teacher 
has  a  total  credit  in  the  fund  of  not  less  than  one-half 
of  the  amount  of  the  first  annuity.  In  case  the  teach- 
er's contributions  do  not  reach  this  standard,  de- 
ductions may  be  made  from  the  first  year's  pension  to 
wipe  out  the  dellciency.  It  is  provid  .-"  owever, 
that,  in  case  of  retirement  tor  disability      .  teacher 


TEACHERS'  RETIREMENT  FUNDS  149 

shall  receive  such  proportion  of  five  hundred  dollars 
per  year  as  the  total  years  of  ser^•ice  bear  to  thirty 
Provision  is  also  made  that,  in  case  of  voluntary  retire- 
ment or  failure  to  secure  reemployment,  all  of  the 
teacher's  contributions,  without  interest,  shall  be 
returned;  also,  that  should  any  teacher  die  before 
drawing  benefits  from  the  retirement  fund,  his  total 
contributions,  without  interest,  shall  be  returned  to 
his  heirs. 

Kentucky 

A  bill  was  passed  by  the  legislature  in  1909,  creating 
a  teachers'  retirement  fund  for  the  dty  of  Louisville 
It  was,  however,  vetoed  by  the  governor.  No  other 
legislaUon  has  been  enacted  on  this  subject. 

Louisiana 

The  legislature  enacted  a  law  in  1910.  providing  for 
the  establishment  of  a  teachers'  retirement  fund  in 
the  dty  of  New  Orleans.    Management :  A  board  of 
trustees,  composed  of  superintendent  of  schools 
three  members  of  the  board  of  school  ciirectors  and 
three  members  of  the  teadiing  force.    Funds:  Gifts 
bequests  and  grants,  together  with  assessments  on 
teachers'  salaries,  as  foUows,  ~  i  per  cent,  if  the 
tocher  has  been  in  the  service  ten  years  or  less  • 
^  per  cent,  if  the  teacher  has  been  in  the  service  ten 
years  and  not  more  than  twenty,  and  2  per  cent  if 


IS©    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

the  teacher  has  been  in  the  service  more  than  twenty 
years.   Beneficiaries:  All  teachers  employed  prior 
to  the  passage  of  the  act  who  voluntarily  accepted  its 
provisions  on  or  before  January  i,  1911 ;  all  teachers 
employed  after  the  passage  of  the  act.   Each  teacher 
must  have  taught  for  forty  years  before  becoming 
eligible  to  a  pension,  except  that,  after  ten  years' 
service,  a  teacher  may  be  retired  by  reas(Hi  of  total 
disability;  provided,  he  has  paid  by  assessments  or 
otherwise  an  amount  equal  at  least  to  that  which  he 
shall  be  entitled  to  receive  lor  the  first  year  of  retire- 
ment.   The  board  of  trustees  may  deduct  one-fifth 
of  the  deficiency  in  contributions  from  the  amount 
of  retirement  salary  for  each  of  the  first  five  years. 
Pensions:  One-half  of  the  teacher's  average  annual 
salary  for  five  years  immediately  preceding  retire- 
ment, provided  that  no  pension  stall  be  less  than 
three  hundred  dollars  or  more  than  six  hundred 
dollars  per  year.   It  is  also  provided  that,  on  leaving 
the  service  before  retirement,  one-half  of  the  teacher's 
contributions  shall  be  returned  to  him,  without 
interest ;  also,  that  if  he  should  die  before  retirement, 
one-half  of  the  amount  he  has  paid  in,  without  in- 
terest, shall  be  turned  over  to  his  estate. 


Maine 

There  arc  no  laws  in  this  state  on  this  subject. 


TEACHEKS*  RETIREIIENT  FUNDS  151 

Maryland 

Law  enacted  in  1908.    Funds:  The  state  appro- 
priates twenty-five  thousand  dollars  per  year,  01  as 
much  thereof  as  may  be  necessary.  Beneficiaries: 
Teachers  who  have  taught  at  least  twenty-five  years 
and  have  reached  the  age  of  sixty  or  become  per- 
manently disabled.   Pensions:  Two  hundred  dollars 
per  year.   The  city  of  Baltimore  has  a  special 
teachers'  retirement  fund  which  became  effective  in 
1908,  but  under  which  no  pensions  were  to  be  paid 
until  1910.   Management:  Seven  trustees,  consist- 
ing of  city  comptroUer,  superintendent  of  schools, 
two  members  of  the  board  of  school  commissioners, 
and  three  teachers.    Fund:  Gifts  and  devises  and 
assessments  on  teachers'  salaries,  as  foUows,  —  in  the 
service  ten  years  or  less,  i  per  cent  per  annum,  but  not 
to  exceed  fourteen  dollars  and  forty  cents  per  year; 
in  the  service  more  than  ten  years  and  less  than' 
twenty  years,      per  cent,  but  not  to  exceed  twenty- 
one  dollars  and  sixty  cents ;  in  the  service  more  than 
twenty  years,  2  per  cent,  but  not  to  exceed  twenty- 
eight  dollars  and  eighty  cents.    Beneficiaries :  Any 
teacher  who  has  been  in  the  ser\'ice  for  forty  years 
may  retire  because  of  such  service;  and  any  teacher 
may  retire  because  of  permanent  incapacity,  after 
twenty  years'  service.  Each  teacher  before  becom- 


152    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ing  eligible  must  have  paid  into  the  fund  an  amount 
equal  to  his  first  year's  pension. 

Massachuseits 

Law  enacted  in  1908  applicable  to  all  cities  and 
towns  in  the  state,  except  the  city  of  Boston.  Man- 
agement :  The  school  committee  of  the  city  or  town. 
Funds:  Such  moneys  as  shall  be  appropriated  or 
derived  from  taxation  authorized  by  the  city  council 
or  by  direct  appropriation  by  a  town.  Beneficiaries : 
Any  teacher  who  is  sixty  years  old  or  over  or  is,  in  the 
judgment  the  school  committee,  incapacitated  for 
service  after  twenty-five  years.  Pensions:  Not  to 
exceed  one-half  of  the  annual  compensation  of  the 
teacher  at  the  time  of  his  retirement  and  in  no  case 
more  than  five  himdred  dollars  per  year.  A  special 
act  relating  to  pensions  for  the  teachers  in  the  city  of 
Boston  was  passed  in  1908  and  amoided  in  1910. 
Manag«nent :  A  board  of  trustees  of  pension  fund, 
consisting  of  the  chairman  of  the  board  of  (^nmis- 
sioners  of  smking  funds  of  the  dty  of  Boston  ex 
officio,  one  member  chosen  by  the  school  committee 
and  the  third  chosen  by  the  board  <rf  trustees  erf  the 
Teachers'  Retirement  Fund  of  the  City  of  Bost<m. 
Fund :  Created  by  setting  aside  five  cents  of  the  tax 
levy  on  each  one  thousand  dollars  of  valuation, 
together  with  interest,  gifts,  and  bequests.  Bene- 


TEACHEXS'  SEUXZICENT  FUNDS 

fidaries:  Any  teacher  attaining  the  age  o'  sixty-five 
years  and  any  teacher  relieved  of  duty  because  of 
incapacity,  provided  that  he  shall  have  taught  for 
thirty  years  or  more,  •  <  vears  of  which  service  shaU 
have  been  in  the  d  ,  Boston.  Pensions:  One- 
third  of  the  annual  salary  paid  to  the  teacher  at  the 
time  of  retirement,  provided  that,  after  thirty  years  f  I 

of  service,  his  pension  shall  not  be  less  than  three  1 
hundred  and  twelve  dollars  nor  more  than  six  hundred 
dollars  per  year.   If  retired  before  thirty  years,  the 
teacher  shall  draw  as  a  pension  such  proportion  of 
these  amounts  as  the  number  of  years  in  the  service 
bears  to  thirty.    In  1907,  the  Retirement  Fund  Asso- 
ciation was  reported  to  have  a  fund  of  $189,689.84, 
out  of  which  it  was  supporting  ninety-five  annuitants 
and  to  which  1885  members  were  contributing.    The  ^ 
superintendent  of  Boston  public  schools  writes,  mder  ^ 
date  of  February  2, 191 1 :  "In  addition  to  the  above-  ^' 
mentioned  pension  law,  we  have  in  Boston  a 
teachers*  retirement  fund,  created  by  the  legislature 
in  1900.   The  mazimimi  pension  payable  from  this 
fund  is  one  hundred  and  dghty  dollars.  All  teachers 
entering  the  service,  subsequmt  to  its  passage,  became 
immediately  members  of  the  retirem«it  fund  asso- 
ciation, and  three  dollars  is  deducted  from  their 
salary  every  alternate  month  and  set  aside  and  placxd 
in  this  fund.  For  all  teachers  who  w«re  in  the  service 


i  3 


I 


i  ;  -f 


1 

1  , 


I 


154     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

prior  to  the  adoption  of  the  act,  membership  in  the 
association  is  opUonal.   In  addition  to  the  regular 
Teachers'  ReUrement  Fund,  there  is  in  Boston  a 
Teachers'  Mutual  Benefit  AssodaUon,  which  com- 
prises teachers  in  the  permanent  employ  of  the  dty. 
They  may  be  admitted  to  this  association  by  a  two- 
thirds  vote  of  the  board  of  trustees,  by  ballot,  and 
upon  the  payment  of  the  initiation  fee  of  three  dollars 
and  assessments.    This  is  a  mutual  organization  of 
teachers  by  which  a  teacher  pays  into  the  treasury 
I  per  cent  of  her  annual  salary  and  recvives,  upon 
becoming  an  annuitant,  such  annuities  as  the  asso- 
ciation is  able  to  pay.    The  association  has  a  fund  of 
about  one  hundred  and  twenty  thousand  dollars; 
and  the  income  from  this,  and  the  receipts  from  assess- 
ments, are  divided  among  the  annuitants  each  year. 
The  association  also  controls  a  private  fund  of  eight 
thousand  dollars." 

It  should  be  mentioned  that  there  is  also  a  Teachers' 
Annuity  Guild  in  Massachusetts,  —  a  voluntary  asso- 
ciation conducted  on  an  assessment  insurance  prin- 
ciple, having  a  membership  of  1 119  (in  1907),  includ- 
ing one  hundred  and  twenty  annuitants.  The  annual 
assessments  are  $16,  $12,  and  $8  per  $1000,  $750,  and 
$500,  respectivc'y  ;  and  the  annuities  paid  in  these 
classes  are  $130,  $103.50,  and  $69,  respectively. 
The  guild  reports  a  permanent  fund  of  $100,000. 


teachers'  retirzment  funds 


Mickigan 

Law  enacted  May  14,  1907,  applicable  to  the  city 
of  Detroit.   Management:  The  board  of  trustees, 
consisting  of  the  president  of  the  board  of  education, 
the  president  pro  tern,  of  the  board  of  education, 
chairman  of  the  conmiittee  on  teachers  and  schoob, 
the  superintendent  of  schoob  and  three  teachers. 
Fund:  Deductions  from  the  salaries  of  teachers, 
not  to  be  less  than  i  per  cent,  nor  to  exceed  3  per 
cent  of  the  salary  of  each  teacher,  a?  determined  from 
time  to  time  by  the  board  of  education,  —  no  greater 
deduction  in  the  aggregate,  however,  than  one  thou- 
sand dollars  from  each  teacher ;  tuition  fees  of  non- 
resident pupils;   gilts,  bequests  and  other  moneys 
authorized  by  the  common  council,  together  with 
interest  derived  from  the  permanent  general  funds. 
Beneficiaries :  Any  teacher  who  has  completed  thirty 
years  in  the  service,  twenty  of  which  have  been  in 
Detroit,  and  any  teacher  who  has  taught  for  twenty- 
five  years  in  Detroit.   The  board  of  trustees  may  also 
place  on  the  annuity  roll  any  teacher  who  has  taught 
twenty-five  years,  fifteen  of  which  have  been  in  Detroit ; 
and  any  teacher  permanently  incapadated  after  ten 
years'  service  in  Detroit.   Pensions :  Tb-^  hundred 
and  thirty  dollars  per  annum,  from  which,  however, 
those  who  have  not  contributed  to  the  fimd  at  least 


156     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

fifteen  years  must  suffer  a  deduction  of  seven  dollars 
and  twenty-five  cents  per  year,  until  their  aggregate 

contributions  sluill  cijiial  such  as  would  have  been 
made  by  regular  contributions  in  fifteen  years.  The 
teachers  of  Saginaw,  Granrl  Rapids,  Kalamazoo  and 
Lansing  have  hc-in  conducting  a  «>stcmatic,  intelli- 
gent campai<,'n  for  the  enactment  of  a  law  to  estab- 
lish a  state-wide  teachers'  retirepient  fund ;  but  thus 
far  without  avail. 

Minnesota 

Law  enacted  in  1909  applicable  to  the  cities  of 
St.  Paul,  Minneapolis  and  Duluth.   This  law  has 
been  put  into  effect  in  the  dty  of  St.  Paul  by  the 
incorporation  of  the  "St.  Paul  Teachers'  Retire- 
ment Fund  Association."   Management :  A  board  of 
eleven  trustees,  five  being  ex  officio  as  follows,  —  the 
mayor,  comptroller,   treasurer,  superintendent  of 
schools  and  president  of  the  board  of  education; 
the  remaining  six  trustees  are  elected  by  the  members 
of  the  association.    The  association  is  composed  of 
all  teachers  in  public  schools  in  the  city  of  St.  Paul. 
Fund:  Initiation  fee  of  five  dollars  and  a  deduction 
of  I  per  cent  of  the  annual  salary  of  each  teacher; 
in  no  case  however,  to  exceed  in  the  aggregate  twenty- 
five  dollars  per  year,  each  teacher,  however,  being 
required  to  pay  into  the  fund  at  least  four  hundred 


TEACHSSS'  UETIKEHENT  FUNDS  157 

dollars  before  becoming  •  titled  to  an  annuity. 
Beneficiaries:  All  teachers  who  become  t'jtally  dis- 
abled and  such  teachers  as  have  taught  for  at  least 
twenty-five  years,  lifteen  of  which  shall  have  he .  n  in 
the  public  schoob  of  the  city.  Pensions:  Four 
hundred  and  eighty  dollars  per  y.ar,  provided, 
however,  if  a  teacher  retires  because  of  total  inca- 
pacity after  five  years  of  service,  the  annuity  shall 
bear  the  same  proportion  to  the  whole  annuity  as  the 
number  of  years  of  service  bears  to  twenty-five. 
Information  concerning  any  teachers'  retirement 
funds  that  may  have  been  established  in  Duluth  or 
Minneapolis  has  not  been  received. 

Mississippi 

Neither  the  state  nor  any  city  within  it  has  adopted 
any  provisions  for  teachers'  pensions. 

Missouri 

There  is  no  law  in  the  state  providing  for  teachers' 
pensions.  The  teachers  of  St.  Louis,  however, 
have  organized  a  "Teachers'  Benevolent  .Annuity 
Association,"  which  began  operations  on  October  12, 
1907.  Management:  An  executive  committee  con- 
sbting  of  the  president,  vice  president,  secretary, 
treasurer  and  five  members  chosen  by  the  associa- 
tion, together  with  a  board  of  eleven  trustees.   Funds : 


IS8    OLD  ACE  DEPENDENCY  IN  THE  UNITED  STATES 

Gifts  and  bequests  and  i  per  cent  of  each  teacher's 
annual  salary  unUl  the  teacher's  contribuUons  amount 
to  I  per  cent  of  the  total  of  his  salary  for  from  twenty 
to  thirty-five  years  of  service,  according  to  his  election. 
Beneficiaries:  Males  who  have  Uught  not  less  than 
thirty  years  and  females  who  have  taught  not  lesr, 
than  twenty-five  years,  [provided  that  the  last  fifteen 
years  of  such  service  has  been  in  connection  with  the 
St.  Louis  public  schools.     Pensions:  To  be  deter- 
mined and  apportioned  annually  hy  the  executive 
committee    and   board   of    tru.o  cs.    It   may  be 
remarked  that  be(  luse  of  a  provisi(  n  in  the  by-laws 
of  the  association,  extending  benelit.-,  to  teachers 
worn  out  in  the  city's  service  b<  fore  the  association 
was  established,  the  board  of  trustees  has,  !)>•  unani- 
mous vote,  placed  many  of  these  vorn-out  teachers 
on  the  annuity  roll  of  the  association.   The  number 
of  such  annuitants  for  the  year  rgii  is  eighty  and  the 
total  amount  paid  out  on  their  behalf  for  the  year  is 
$14,400.   It  may  also  be  of  mterest  to  know  that  the 
permanent  fund  of  the  association  amounted,  in 
October,  1910,  to  $123,500,  which  is  carefully  invested 
for  future  use.   Notwithstandmg  the  apparent  flour- 
ishing condition  of  ilii>  \oluntary  association,  the 
teach ors  of  St.  Louis  and  other  cities  of  the  state 
are  making  a  strong  eflort  for  the  enactment  of  a  law 
providing  for  state-wide  teachers'  pensions. 


TBACBSu'  xetheicbnt  funds 


Montana 

That  is  no  law  providing  for  the  establishment  of 
teachers'  retirement  funds ;  nor  have  any  such  funds 
been  establi^ed  by  voluntary  action  in  the  state. 

Law  enacted  in  1909  applicable  only  to  the  city  of 
Omaha.  Management:  Board  of  Education.  Fund: 
Created  by  an  ..sscssment  of  not  less  than  i  per  cent 
nor  more  than  i\  per  cent  of  every  instalment  of 
salary  paid  to  teachers  and  an  appropriation  from 
the  general  fund,  available  for  school  purposes,  of  an 
amount  not  less  than  one  and  one-half  times  the 
amount  of  such  s;ilary  assessments  and  not  less  than 
the  amount  necessary  to  meet  the  drniands  of  the 
fund;  als.  by  gifts  and  devises.  Benefuiarics :  Any 
teacher  who  has  been  v-  the  service  thirty  five  years 
may  be  retired  on  -pqucol ;  any  teacher  who  has  bu  n 
forty  years  in  il  •  str-  ice  is  entitled  to  service  retire- 
ment ;  but  to  be  entitkd  to  full  pension,  such  teacher 
must  have  had  at  least  twenty  years'  service  in  the 
public  schools  of  Onaha.  Teachers  may  also  be 
retired  because  of  disability,  after  twenty-five  or 
more  years  of  service,  twenty  of  which  must  have  been 
in  the  city  of  Omaha.  Pensions:  Five  hundred 
dollars  per  year  or  such  portion  thereof  as  the  number 


l6o    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

of  years'  service  l)e:ir.s  to  lhir)y-five.  Xo  teacher, 
because  of  contributions  to  the  pension  fund,  is  im- 
mune from  discharge  at  the  discretion  of  the  board  at 
any  time;  and  if  so  discharged  for  cause  other  than 
disability,  incapacity  or  length  of  ser\  ice.  such  teacher 
by  the  law  forfeits  the  contribution.,  made  to  the 
fund.  The  pension,  however,  is  exempt  from  attach- 
ment, gamJshment  or  other  execution. 

Nevada 
No  information  at  hand. 

New  BampsMre 
No  law  has  been  enacted  by  the  state  on  the  subject, 
nor  has  any  information  come  to  hand  showing  that 
any  city  has  established  a  teachers'  retirement  fund. 

Xciv  Jersey 

This  state  has  two  teachers'  pension  laws:  First, 
"a  thirty-five  years'  district  half-j^ay  pension  law"; 
second,  a  teachers'  retirement  fund.  The  first  pro- 
vides for  a  pension  to  any  teacher  en.ployed  in  the 
stete  for  not  less  than  thirty-five  years,  -  such  pen- 
sion amounting  to  one-half  of  the  average  annual 
salary  during  the  last  five  years  of  service.  This  law 
is  state-wide;  and  the  pensions  are  paid  out  of  funds 
available  for  school  purposes.   The  second  plan  was 


teachers'  retieement  funds  i6i 

established  March  ii,  1896.   Management:  A  board 
of  trustees,  consisting  of  the  state  superintendent  of 
public  instruction,  three  persons,  not  teachers,  to  be 
selected  by  the  governor,  and  five  persons  to  be  nomi- 
nated by  the  teachers  of  the  state  in  annual  conven- 
tion, and  appointed  by  the  governor.    Fund:  Two 
per  cent  of  the  contractual  monthly  salary  of  each 
teacher  in  the  service  for  ten  years  or  less;  2 J  per 
cent  of  such  salary  of  each  teacher  over  ten  and  less 
than  fifteen  years  in  the  service ;  3  per  cent  of  such 
salary  of  each  teacher  in  the  service  for  fifteen  years 
or  more;  provided,  that  the  annual  deduction  from 
each  teacher  shall  not  exceed  fifty  dollars  in  any  year 
nor  shall  the  total  deduction  from  any  one  teacher 
exceed  one  thousand  dollars.   Beneficiaries:  Any 
teacher  employed  in  the  public  schools  of  the  state  for 
twenty  years  and  becoming  incapacitated  for  duty. 
Pensions:  Six-tenths  of  the  average  annual  salary 
received  by  the  teacher  for  the  five  years  next  preced- 
ing date  of  retirement;  provided,  that  no  pension 
shall  be  less  than  two  hundred  and  fifty  dollars  nor 
shall  any  teacher  receive  a  pension  of  more  than  six 
hundred  and  fifty  dollars.    If  any  teacher  retires 
before  having  paid  into  the  fund  an  aggregate  of  one 
thousand  dollars,  the  unpaid  balance  may  be  made 
up  in  a  lump  sum,  or  the  board  of  trustees  may  with- 
hold annuity  payments  and  credit  the  amounts  thereof 


l62     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


to  the  teacher's  account  until  the  one  thousand  dollars 
have  been  paid.  It  may  be  remarked  that  teachers 
employed  in  the  slate  prior  to  January  i,  1908,  were 
given  the  option  of  declining  to  come  within  the  pro- 
visions of  the  hnv.  Thosr  employed  alter  January  i, 
1908,  are  ipso  facto  amenable  to  the  retirement  fund 
law.  Concerning  the  operation  of  this  pension  scheme 
in  New  Jersey,  the  general  secretary  of  the  fund 
reports  as  follows :  — 

During  our  long  struggle  to  obtain  the  law,  we  were  con- 
stantly assured  by  high  authorities  that  we  would  never  secure 

such  rin  act.  After  our  bill  became  law,  it  was  freely  pre- 
dicted that  the  fund  would  never  grant  an  annuity;  but,  as 
has  been  said,  "prophecy  is  a  hazardous  occupation"  which  is 
proved  by  a  recapitulation  of  the  history  of  our  fund.  In 
fifteen  years,  we  have  raised  over  half  a  million  dollars 
(S547.974  Q0) ;  have  paid  $.Vi4.iVV4i  in  annuities,  and  on 
June  30,  1910,  we  had  a  net  surplus,  all  annuities  and  bills 
pMd,  of  $193,641.40,  of  which  $124,750  was  invested,  and 
$68,891.49  cash  in  bank.  The  first  annuity  was  granted 
December  3,  1S07,  to  Joseph  P.  LciRhton.  a  Morris  County 
teacher  seventy-four  years  of  age,  who  had  taught  fifty-eight 
years,  and  whose  salary  had  never  exceeded  $312.  That 
grateful,  loyal  gentleman  has  gone  to  his  final  reward,  his  last 
years  solaced  by  the  Retirement  Fund.  In  1807-1X0S,  $870  or 
was  paid  in  annuities;  in  1909-1910,  annuities  paid  amounted 
to  $86,648.81,  and  annuities  payaUe  for  1910-1911  amounted, 
June  30,  loio,  to  $100,313.91.  Other  figures  in  our  recapitu- 
lation from  the  beginning,  are:  310  annuities  ({ranted ;  value, 
$122,45^.38;  average  value.  $395.01.  (The  rapid  growth  in 
the  average  value  of  annuities  is  shown  by  the  average,  $460.88, 


TEACHEKS'  KETIMIIIKT  FUNDS  163 

of  the  74  annuities  granted  last  year,  compared  with  an  aver- 

age  of  $395.01  for  the  total  310  annuities.)  Rebates  amount- 
ing to  $i,i2i.8o  have  been  paid.  (N.B.  -  The  Act  of  1907 
abolished  the  rebate  of  oae-half  the  amount  paid  in,  granted 
by  former  acts  to  members  who  ceased  teaching  in  New  Jersey 
after  contributing  to  the  fund  not  less  than  five  years.)  Sixty- 
two  annuiunts  have  died ;  value  of  their  annuities,  $21,938.4-  ; 
average,  $353.84.  Two  hundred  and  forty-eight  annuitants 
were  living  June  30, 1910;  vatae  of  their  annuities,  $too  513  qi  • 
averafe,  $405.09.  '  ' 

^few  Mexico 

No  law  has  been  enacted  eiiher  for  the  territory  or 
any  city  or  section  thereof. 


New  York  SMe 

The  first  agitation  for  state  legislation,  so  far  as  the 
records  go,  was  made  by  the  teacaers  of  Brooklyn, 
in  1878.  BiUs  were  introduced  in  the  legislature  at 
their  request  in  1879  and  i88i,  but  faOed  to  become 
laws.  The  first  law  enacted  for  any  dty  in  the  state 
along  this  line  was  for  New  York  City,  in  1894,  —  a 
summary  of  which  follows :  — 

New  York  City:  Management:  A  board  of  seven 
trustees,  composed  of  the  president  of  the  board  of 
education,  chairman  of  elementary  schools'  com- 
mittee, chairman  of  high  schools'  committee,  superin- 
tendent of  schools  and  three  teachers.  Fund  :  Gifts, 
tlfvises,  5  per  cent  of  excise  moneys,  deducUons  from 


164    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

teachers'  salaries  on  accottnt  of  absences  and  x  per  cent 
of  each  teacher's  salary,  but  not  to  exceed  thirty 
dollars  a  year  for  teachers  or  principals  or  forty 
dollars  a  year  for  sup  .visors.  Beneficiaries:  Any 
teachei  who  has  been  in  the  service  for  thirty  years, 
fifteen  of  which  were  in  Xow  "\'ork  City,  and  who  has 
reached  the  age  of  sixty-five.  After  twenty  years, 
fifteen  of  which  have  been  in  the  service  in  New  York 
City,  any  teacher  may  be  retired  for  permanent 
incapacity.  Pension :  One-half  salary ;  but  not  to 
exceed  fifteen  hundred  dollars  for  teachers  or  princi- 
pal, or  two  thousand  dollars  for  supervisors,  with  the 
minimum  fixed  in  every  case  at  six  hundred  dollars. 
The  Secretary  of  the  Board  of  Retirement  of  the 
Department  of  Education  of  New  York  City  stated, 
in  an  address  before  the  Pittsburgh  Teachers'  Retire- 
ment Association,  November  19,  1910,  that  1443 
teachers  have  been  retired  in  New  York  City  since 
1894.  From  the  establishment  of  the  fimd  to  Decem- 
ber 31,  1909,  its  total  income  was  $7,033,079.73; 
and  its  total  of  pensions  paid  out,  during  the  same 
period,  was  $5,406,861.  The  balance  invested  on 
January  t,  iqto,  was  $1,626,077.73.  Of  the  1385 
teacher^-  retired  lo  February  i,  1910,  three  had  given 
more  than  sixty  years  of  service,  sixty-three  had  given 
between  fifty  and  sixty  years,  and  two  hundred  and 
forty-nine  had  given  from  forty  to  fifty  years  of 


T2ACH£RS'  SETIREMENT  nJNDS  165 

service.  The  average  service  of  all  annuitants  is 
given  as,  males,  forty-one  years,  nine  numths ;  females, 
thirty-four  years,  three  months. 

Several  other  cities  in  New  York  — Albany,  Troy, 
Buffalo,  Rochester,  Ehnira,  Schenectady,  Syracuse, 
etc.  —  have  pension  funds  in  operation  which  are  more 
or  less  similar;  and,  therefore,  a  description  of  each 
is  not  necessary.  Those  of  Buffalo  and  Rochester 
following  may  be  taken  as  typical  of  the  others: 
to  wit: — 

BuJJtilo:    Management:   Board  of  five  trustees, 
consisting  of  the  mayor,  superintendent  of  education, 
chairman  of  the  board  of  examiners,  president  of 
Principals'  Association  and   president  of  Women 
Teachers'  Association.    Fund :  All  moneys  comprising 
the  Public  School  Teachers'  Retirement  Fund  at  the 
time  of  the  passage  of  the  act  (the  accumulations 
under  a  former  retirement  fund  law  passed  for  Buffalo 
in  1896);  gifts,  legacies,  etc.;  moneys  appropriated 
by  the  Common  Council,  which  shall  not  exceed  in 
any  year  the  total  deductions  from  teachers'  salaries 
in  the  preceding  year;  deductions  from  teachers' 
salaries  not  less  than  i  nor  more  than  2  per  cent  per 
annum.   Beneficiaries :  Any  female  teacher  who  has 
served  for  twenty  years  and  any  male  teacher  for 
twenty-fi\  e  years  may  he  retired  because  of  perma- 
nent incapacity;  provided,  that  four-fifths  of  such 


l66    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

service  was  in  the  public  schools  of  BufTalo.  Any- 
female  teacher,  after  thirty  years,  and  any  male 
teacher,  after  thirty-five  years,  shall  have  the  right  to 
retire  because  of  service.  Pensions :  One-half  of  the 
annual  salary  paid  to  the  teacher  at  the  time  of  his 
retirement ;  provided  that  the  teacher's  total  contri- 
butions equal  40  per  cent  of  his  annual  salary  at  the 
time  of  retirement.  Should  his  contributions  be  less 
than  that,  deductions  will  be  made  from  the  pension 
until  the  amount  to  hb  credit  in  the  fund  meets  this 
requirement.  It  is  also  provided  that,  in  case  the 
fund  is  not  sufficient  to  pay  all  pensions  in  full, 
they  may  be  prorated  accordingly ;  also,  that  if  any 
teacher  fails  of  reelection  or  reemployment  in  the 
service,  he  snail  be  entitled  to  draw  out  all  the  money 
deducted  from  his  salary  for  the  benefit  of  the  retire- 
ment fund,  without  interest. 

Rochester:  Management:  A  board  of  trustees, 
consisting  of  the  commissioners  of  schools,  the  super- 
intendent, one  principal  and  one  teacher.  Fund: 
Donations,  legacies,  etc. ;  an  amount  to  be  paid  by 
the  city  of  Rochester  from  funds  available  f(,r  school 
purj)oses,  not  to  exceed  in  any  year  one-half  the  total 
sum  deducted  from  the  teachers'  salaries  for  the  pre- 
ceding year;  2  per  cent  of  the  annual  salaries 
paid  to  teachers.  Benefidaries:  Any  teacher  who, 
after  twenty  years,  if  a  female,  and  twenty-five  years, 


TEACRESS'  RimEMENT  FUNDS  167 

if  a  male,  is  refused  reappointment ;  provided  that 
not  less  than  fifteen  years  of  such  service  have  been 
in  the  public  schools  of  Rochester;  any  teacher  who 
has  been  for  thirty  years,  if  a  female,  or  for  thirty- 
five  years  if  a  male,  in  the  service,  with  fifteen 
years  of  such  service  in  the  public  schools  of  the  city, 
may  be  retired  for  service.    Pension:  One-half  of 
the  annual  salary  at  the  time  of  retirement,  not 
exceeding,  however,  eight  hundred  dollars.  Should 
the  fund  be  insufficient  to  pay  all  pensions  in  fuU, 
they  shaU  be  prorated  accordingly;  but  no  teacher 
shall  become  a  pensioner  until  he  has  paid  into  the 
fund  at  least  forty  per  cent  of  the  amount  of  his 
annual  salary  at  the  time  of  retirement.    It  is  pro- 
vided that  if  a  teacher  is  discharged  before  becoming 
a  F)ensioner,  all  tUv  money  deducted  from  his  salary, 
without  interest,  shall  be  returned.     The  Fifty-fifth 
Report  of  the  Board  of  Education  01  the  City  of 
Rochester,  for  tnc  years  igo8,  1909  and  1910,  shows 
that  twenty-two  teachers    have   been  placed  on 
the  retired  list ;  and  that  there  have  been  recci\  ed 
from  the  teachers  $42,777  03,  and  from  the  Boar'?  of 
Education,  $21,389.02,  and  from  sundry  other  sources, 
smaUer  amounts,  making  the  total  receipts  in  the 
Teachers'  Retirement  Fund  $77,504.25.  out  of  which 
$13,267.26  have  been  paid  in  pensions,  and  other 
small  amounts  for  miscellaneous  purposes,  making 


l68    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

total  disbursements,  $13,985.1)1.  leaving  a  balance  of 
$63,518.34,  of  which  $45,000  is  invested  and  the  bal- 
ance is  in  bank. 

New  York  Slate:  A  long  agitation  for  a  state- wide 
teachers'  retirement  fund  in  the  state  of  \cw  York 
ended  successfully  June  26,  191 1,  when  the  bill  passed 
by  the  legislature  was  approved  by  the  governor. 
Management:  A  State  Teachers'  Retirement  Fund 
Board  of  five  members  appointed  by  the  commissioner 
of  education,  one  of  whom  shall  be  a  superintendent 
of  schools  in  a  dty  or  district,  one  an  academic  prin- 
cipal and  one  a  teacher  in  an  elanentary  school. 
It  is  provided  that  one  of  the  members  of  this  board 
shall  be  a  woman  teacher  in  the  public  schools. 
Fund:  Deductions  from  teachers'  salaries  to  the 
amount  of  i  per  cent  per  annum  obligatory  upon 
teachers  employed  after  the  passage  of  the  act  and 
o[)tional  upon  all  teachers  whose  contracts  were 
entered  into  prior  to  the  passage  of  the  act  ;  donations, 
legacies,  interest,  etc.,  and  such  appropriati<,:irf  as 
may  be  made  by  the  state  legislature  from  time  to 
time  to  meet  the  requirements  of  the  fund  fiene- 
ficiaries :  Any  teacher  who  has  been  in  the  service  for 
twenty-five  years,  the  last  fifteen  of  which  shall  have 
been  in  the  public  scho^^ls  of  the  district  or  cities  of 
the  state,  subject  to  the  provisions  of  the  law;  and 
any  teacher  who  has  been  in  the  service  for  fifteen 


TEACBERS'  RETIIIEKENT  FUNDS  1 69 


year?,  thf  last  nine  of  which,  or  more,  were  in  such 
schools,  miy  be  retired  for  incapacity;  provided  that 
no  teacher  shall  be  entitled  to  an  annuity  who  has 
not  contributed  to  the  fund  an  aggregate  of  at  least 
30  per  cent  of  the  annuity  allowed.  Should  his  con- 
tributions have  fallen  short,  the  deficit  may  be  made 
up  by  deductions  from  his  pension,  or  by  a  limip  con- 
tribution. Pensions:  Beginning  on  August  i,  1913, 
each  teacher  retired  for  service  shall  receive  an 
aimuity  equal  to  one-half  of  the  annual  salary  drawn 
at  the  time  of  retirement ;  provided  that  no  annuity 
shall  exceed  six  hundred  dollars.  In  case  of  retire- 
ment for  disability,  the  teacher  shall  rcceivi  «uch 
proportion  of  the  lull  annuity  as  the  number  0/  y,  a'.-- 
taught  bears  to  twenty- five.  It  should  be  remarked 
that  this  law  is  not  made  to  apply  to  districts  and 
cities  which  have  already  sccur'^i  the  passage  of 
special  teachers'  pension  acts,  as  above  described ; 
but  otherwise  is  general  in  its  application  throughout 
all  the  counties  01  the  state. 


North  CaroUna 

No  law  has  been  enacted,  although,  in  the  early 
part  of  191 1,  the  North  Carolina  Teachers'  Assembly 
had  imder  consideration  the  prq}aration  of  a  bill  for 
this  purpose. 


I70    OLD  AGE  DEPENDENCY  IN  THE  UNITED  8TATI8 


North  Dakota 

The  superjnt.  ndcnt  of  public  instruction  reports 
that  there  is  no  luw  pruMrlins  for  teachers'  pensions 
in  the  state;  nor  is  there  any  loinmunity  in  which 
8uch  pensions  have  been  established  by  municipal 
or  voluntary  action. 

Ohio 

The  teachers'  pensi  on  fund  law,  as  amended  by  the 
General  Asscn.hly,  March,  .906,  and  in  191 1,  pro- 
vides that  tiie  board  of  education  of  any  school  dis- 
trict may  create  a  schot)!  teachers'  pension  lund  for 
such  district,  which  shall  be  under  the  management  of 
a  board  of  trustees  composed  of  not  less  than  three 
nor  more  than  seven,  two  of  whom  must  be  elected 
by  the  board  of  education  and  the  rest  chosen  by  the 
teachers  of  the  schools  in  the  district.   Fund :  Shall 
be  created  by  deducting  from  the  salary  of  each  teacher 
in  the  district  two  dollars  per  month,  to  be  supple- 
men  ted  by  an  appropriation  by  the  board  of  educa- 
tion of  a  sum  not  less  than  i  per  cent  nor  more  than 
2  per  cent  of  the  gross  receipts  for  school  purposes 
by  taxation.    Beneficiaries:  Teachers  who  have  been 
in  the  service  for  thirty  years,  one-half  of  which  must 
h.ne  been  in  the  [niblic  schods  of  the  school  district; 
provided  that  \\\v  teacher  shall  have  paid  into  the 
fund  a  sura  equal  to  twenty  dollars  a  year  for  each 


tiacbem'  SEnmiBfr  fUMM  tji 

year  of  service;  but  not  to  exceed  an  aggrt-Kate  of  six 
hundred  dollars.   Should  this  aggregate  not  have 
been  paid,  the  board  of  trustees  must  deduct  20  {)er 
cent  of  each  payment  to  the  pensioner  until  the 
credits  on  account  of  such  deductions,  together  with 
the  former  contributions  of  Uie  teacher,  amount  to 
six  hundred  dollars.  Teachers  who  have  been  in  tiie 
service  for  twenty  years  on  like  conditions  and  have 
become  totally  incapacitated  may  also  be  retired. 
Pensions :  Twelve  dollars  and  fifty  cents  for  each  and 
every  year  of  scrx  ic  c  rmdcred ;  but  not  to  exceed 
four  liundrcd  and  fifty  dollar  in  any  one  year.  Sev- 
eral of  the  lities  of  the  slate  have  taken  advantage 
of  this  law  and  hax  e  established  funds,  notably  Colum- 
bus, Toledo,  Cleveland,  Dayton  and  Cincinnati. 

Oklahoma 

No  legislation  on  the  subject  has  been  oblairu-d, 
alUiough  a  strong  effort  was  made  for  a  pension  law 
during  the  1911  session  of  the  legislature. 

Oregon 

The  state  legislature  has  enacted  a  law  which  went 
into  efTect  May  11,  1911,  autiiorizing  Uie  creation  of 
teachers'  retirement  fund  associations.  A  brief  sum- 
mary of  this  law  is  as  foUows:  The  teachersof  every 
school  district  having  ten  tiiousand  children  of  school 


172    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

age  may,  with  the  consent  of  the  board  of  directors  of 
such  district,  organize  and  incorporate  an  association 
on  such  plans  as  the  board  of  directors  of  the  district 
may  approve.  The  law  provides  that  a  sum  equal 
to  I  per  cent  of  the  amount  of  tax  received  by  said 
school  district  for  school  purposes  shall  be  paid  to 
such  association  as  rapidly  as  the  money  is  received, 
which  shall  be  held  and  invested  by  the  association 
as  a  retirement  fund.  There  seems  to  be  consider- 
able elasticity  in  the  law  relative  to  raising  funds 
from  other  soiu'ces,  as  each  association  "shall  have 
full  power  and  authority  to  receive,  collect,  invest, 
loan  and  deposit  funds  in  accordance  with  the  said 
plan  so  adopted."  It  is  provided,  however,  that  in 
case  the  funds  of  the  association  are  not  sufficient  to 
pay  pensions  in  full,  as  agreed  upon  in  the  plan, 
pensions  shall  be  prorated;  also  that  the  ftmds  avail- 
able for  pensions  shall  be  exempt  from  all  process  of 
execution. 

Pennsylvania 

The  present  law  in  this  state  was  enacted  May  23, 
1907;  and  is  applicable  to  cities  of  the  second  ana 
third  classes  only.  Funds:  Such  as  may  be  avail- 
able at  the  time  the  law  was  passed  and  such  as  may 
be  appropriated  from  time  to  time  by  the  school 
authorities,  together  with  donations  and  bequests. 
Beneficiaries  and  Pensions :  Any  teacher  who  retires 


teachers'  retzsement  PUNDS  173 

with  the  consent  of  the  school  authorities  may  receive 
such  pension  as  those  authorities  prescribe. 

Pittsburgh:  Under  this  law,  the  Pittsburgh  Teachers' 
Retirement  Association  was  organized  January  25, 
1908.   Management:   A  board  of  eight  trustees, 
three  of  them  business  men,  three  teachers,  and  the 
superintendent  of  pubUc  schools  and  a  supervising  offi- 
cer.  Funds :   Donations,  bequests;  and  two  dollars 
per  month  during  the  school  year  from  each  teacher 
until  he  shall  have  paid  in  the  sum  of  six  hundred 
dollars.    Beneficiaries:   Teachers  who  have  taught 
for  thirty  years,  fifteen  of  which  have  been  in  the  city 
public  schools,  and  those  who  have  taught  more  than 
ten  and  less  than  thirty  years  and  become  permanently 
incapacitated.    Pensions:    Four  hundred  dollars  a 
year;  provided  that  for  disability  retirement,  pen- 
sion shall  be  as  many  thirtieths  of  this  amount  as  the 
number  of  years  taught  bears  to  thirty.   It  is  also 
provided  that  if  a  teacher  resigns  after  two  years' 
service,  he  may  receive  a  refund  of  50  per  cent  of 
what  he  has  paid  in ;  and,  in  the  event  of  the  death 
of  a  teacher,  50  per  cent  of  his  contributions  shall  be 
paid  to  his  heirs.   The  report  of  the  treasurer  for  the 
year  ending  October  15,  1910,  shows  $50,439.78  as 
the  fund's  assets  at  that  time. 

Hanisburg  has  also  a  teachers'  retirement  fund, 
estabUshed  by  action  of  the  board  of  school  directors 


174     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

April  3,  1908.    Management:  A  retirement  board, 
consisting  of  the  president  and  two  members  of  the 
board  of  school  directors  and  two  teacliers.    Funds : 
Annual  provisions  by  the  school  directors,  equal  to  the 
contributions  made  by  the  teachers  during  the  preced- 
ing year;  2  per  cent  of  the  salaries  of  teachers  in  the 
service  ten  years  or  less,  and  3  per  cent  of  those  more 
than  ten  years;  provided  that  the  maximum  con- 
tribution from  a  teacher  in  any  one  year  shall  not  ex- 
ceed fifty  dollars.    Beneficiaries :  Teachers  who  have 
taught  thirty  years,  twenty  of  which  shall  have  been 
in  the  Harrisburg  public  schools,  and  teachers  who 
are  retired  by  disability  after  five  years  of  service; 
provided  that  no  teacher  shall  be  entitled  to  a  full 
annuity  unless  he  has  made  contributions  equal  to 
at  least  twenty-five  years'  deductions.  Pensions: 
One-half  the  annual  salary  at  the  date  of  retirement ; 
minimum,  three  hundred  dollars;   maximum,  eight 
hundred  dollars.    In  case  of  retirement  before  twenty- 
five  annual  contributions  to  the  fund  have  been  made, 
the  pension  shall  be  such  proportion  of  the  whole 
amount  as  the  number  of  years  taught  bears  to  twenty- 
five.    It  is  provided  also  that  the  pensions  may  be 
prorated  if  the  funds  are  not  sufficient  for  full  annui- 
ties.   It  is  also  provided  that,  at  the  discretion  of 
the  board  of  directors,  partial  pensions  may  be  granted 
teachers  disabled  after  five  years'  service. 


teachers'  retirement  funds  175 

Philadelphia  has  a  teachers'  retirement  fund  which 
went  into  operation  January  i,  1907,  in  pursuance  of 
a  special  act  of  the  legislature,  passed  April  22,  1905. 
Management :  A  retirement  board  consisting  of  the 
president  and  two  members  of  the  board  of  public 
education,  one  member  of  the  department  of  super- 
intendents and  one  teacher    Funds  :  Approi)riation 
by  the  board  of  public  education  of  lifty  thousand 
doUars  for  the  year  1907 ;  and,  for  the  years  there- 
after, of  sums  equal  to  the  contributions  by  the 
teachers  for  the  preceding  year,  and  teachers'  con- 
tributions at  the  rate  of  1  per  cent  of  the  salaries  of 
those  in  the  service  of  the  pubHc  schools  of  the  city 
for  ten  years  and  less,  and  2  per  cent  of  thise  more 
than  ten  years;  provided  that  the  maximum  contri- 
bution by  any  teacher  in  any  one  year  shaU  not  exceed 
the  sum  of  fifty  dollars.   Benefidaries:  Any  teacher 
who  has  given  thirty  years  of  service,  twenty  of  which 
have  been  in  the  public  schools  of  the  city;  any 
teacher  w!io  has  been  in  the  service  of  the  city  schools 
for  more  than  five  years  and  is  retired  on  account  of 
disability;    provided,   however,    that  any  teacher 
who  has  made  less  than  twenty-fi^•e  annual  contribu- 
tions to  the  retirement  fund  shall  be  entitled  to  or.iy 
such  benefit  as  the  number  of  annual  contributions 
bears  to  the  number  of  twenty-five.  Pensions: 
One-half  of  the  annual  salary  at  the  date  of  retire- 


176    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ment ;  provided  that  the  minimum  pension  shall  be 
four  hundred  dollars  and  the  maximum,  eight  hun- 
dred dollars,  except  that,  if  the  fund  permits,  the  retire- 
ment board  may  increase  the  maximimi  to  at  least 
one  thousand  dollars.  It  is  also  provided  that 
teachers  may  retire  volxmtarily  on  full  pension  if 
they  have  reached  the  age  of  sixty  and  served  thirty 
years,  twenty  of  which  h&ve  been  in  the  public  schools ; 
also  that  teachers  may  be  etired  for  disability  on 
full  pension  after  like  service.  Teachers  dismissed 
from  the  service  shall  be  entitled  to  a  refund  of  what 
they  have  paid  into  the  retirement  fund,  without 
interest.  The  treasurer'  report  shows  that  from 
1907  to  1909  the  total  amount  received  was 
$411,078.68,  out  of  which  $97,653.69  had  been  paid  in 
pensions.  After  deducting  expenses,  refunds,  etc., 
there  remained  invested,  $302,558.52.  The  number 
of  annuitants,  December  31,  1909,  was  one  hundred 
and  thirty-five. 

^tode  Island 

State-wide  teachers'  pension  law  was  enacted  in 
January,  1907 ;  and  provides  that  any  teacher  who 
has  been  for  thirty-five  years  in  the  service,  twenty- 
five  years  of  which,  including  the  fifteen  immediately 
preceding  retirement,  have  been  in  the  state,  and  who 
shall  fail  of  reemployment,  or  voluntarily  retire,  shall 


TEACHERS*  RETIREMENT  FUNDS  177 

receive  a  pension  equal  to  one-half  of  his  actual  con- 
tractual salary  during  the  five  years  before  retiring; 
but  in  no  case  to  exceed  live  hundred  dollars  per  year. 
It  is  reported  that  since  this  law  went  into  effect, 
eighty-two  teachers  (up  to  the  end  of  1910)  have  been 
retired  on  annual  incomes  of  three  hundred  and 
thirty-one  dollars  per  year;  and  that  the  state  has 
paid  a  total  to  retiring  teacht.rs  of  $32,887.34. 

The  City  of  Prffoidence,  however,  has  a  special 
teachers'  retirement  fund,  estabUshed  by  an  act  of 
the  legislature.  May  21,  1897,  which  may  be  sum- 
marized as  foUows:  Management:  A  board  of  trus- 
tees, consisting  of  the  chairman  of  the  school  com- 
mittee, three  members  chosen  by  such  committee, 
the  superintendent  of  the  schools,  the  dty  treasurer 
and  three  teachers.   Fund:   Donations,  bequests, 
etc.,  deductions  of  i  per  cent  from  teachers'  salaries; 
provided  that  "no  teacher  shall  be  assessed  for  more 
than  I  per  cent  of  twelve  hundred  doUars  per  annum." 
Beneficiaries:  Any  teacher  who  has  contributed  to 
^he  fund  at  least  five  years  and  shall  have  taught  in 
ihe  public  schools  not  less  than  thirty-five  years,  if 
a  man,  and  thirty,  if  a  woman,  twenty  of  which  shall 
have  been  in  the  city,  may  be  retired  or  may  volun- 
tarily retire;  and  any  teacher  who  has  taught  not 
less  than  ten  years,  and  contributed  to  the  fund  for 
five  years,  may  be  retired  for  incapacity.    Pensions : 

N 


X78    OLD  AGE  DEPENDENCY  IN  THE  XTNTTED  STATES 

One-half  of  the  salary  at  time  of  retirement;  pro- 
vided that  no  pension  shall  exceed  six  hundred  d'^l- 
lars  a  year.  It  is  also  provided  that,  in  case  the  fund 
is  insuflfident  to  pay  all  pensions  in  full,  they  shall 
be  prorated  accordingly.  The  Annual  Report  of  the 
School  Committee  of  Providence,  fo-  the  year  190^ 
1910,  shows  that  the  number  of  t*-  '  rs  on  the  pen- 
sion roll  is  forty;  and  that  the  L-aount  paid  out  for 
pensions  that  year  was  $7,815.14.  The  total  amoimt 
paid  out  in  pensions  since  the  fimd  was  established  up 
t'  the  end  of  the  school  year  1910  was  $45,001. '  .  • 
and  the  balance  in  the  fund  was  $64,783.51. 

Smth  Carolina 

There  is  no  state  law  on  the  subject.  It  seems 
that  the  city  of  Charleston  has  a  retirement  fund, 
information  concerning  which  has  not  been  received. 

South  Dakota 
There  is  no  law  of  the  state  relating  to  the  subject. 

Temiessee 

There  is  no  law  on  the  statute  books  relating  to 
teachers'  pensions. 

Texas 

No  law  providing  for  teachers'  pension  funds  has 
yet  been  enacted  in  the  state. 


TJiACIIERS'  RETIREMENT  fUNDS 


Utah 

The  legislature  of  the  state  has  authorized  the 
formation  of  pubh'c  school  teachers'  retirement  com- 
missions,  with   the   following  plan  of  operation: 
Management:    The  commission  in  each  case  hhall 
consist  of  seven  members.      llie  siii^.LTintcndent  of 
schools,  clerk  of  the  board  „f  (duration,  two  mem- 
bers selected  by  the  board  of  edmati.-n  and  three 
members  selected  by  the  teachers.    Funds:  D(ma- 
tions,   bequests,   etc.,   deductions   from    teac!  ;rs' 
salaries  on  account  of  absence  and  i  per  cent  of  ei  h 
teacher's  salary.    Beneficiaries:  Any  teacher  inca- 
pacitated after  thirty  years  of  service,  five  yeare  of 
which  have  been  in  the  district  covered  by  the  commis- 
sion ;  and  any  teacher  who  has  reached  the  age  of 
sir-    T^Nh  thirty  years  of  service,  one-third  of  which 
hi  -  i  the  district  covered  by  the  commission. 

Prn.  s .  One-half  of  the  average  annual  salary  for 
the  li\  e  years  preceding  retirement,  pr.n  ided  that  if 
retired  before  thirty  years  of  service  his  pension  shall 
be  such  i)roportion  of  the  full  pension  as  the  years 
of  service  bear  to  thirty.  It  is  al^o  provided  that 
any  teacher  dJsmis.sed  or  withdrawing  from  the 
service  shall  be  entitled  to  a  refunr!  of  ;dl  money  paid 
in,  without  interest;  also,  that  in  case  the  fund  is 
insufficient  at  any  time  to  pay  all  claims  in  full,  they 


l8o    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

shall  be  prorated  accordingly.  So  far  as  rej-orted, 
Salt  Lake  Cily  is  the  only  si  hool  district  in  the  state 
that  has  established  such  commission  as  the  law  pro- 
vides for. 

Vermont 

There  is  a  law  in  the  state  whereby  a  town  may  vote 
a  pension  to  a  person  who  has  taught  thirty  years  in 
the  state,  such  pension,  however,  not  to  exceed  one 
half  of  the  average  salary  received  by  the  pensioner 
during  the  five  years  last  preceding  his  retirement. 
The  superintendent  of  educatior  writes,  imder  date 
of  March  8,  191 1,  that  a  teachers'  retirement  fimd 
association  has  been  organized  for  the  purpose  of 
taking  under  consideration  the  establishment  of  a 
teachers'  pension  fund. 

Virginia 

The  legislature  passed  a  law  March  9,  1910,  which 
may  be  summarized  as  folK)ws :  Management :  The 
state  board  of  education.  Fund :  Five  thousand 
dollars  per  year  from  the  state  treasury,  legacies, 
bequests,  etc.,  and  deductions  from  teachers'  salaries, 
not  to  exceed  i  per  cent  per  anmmi.  Beneficiaries : 
Any  teacher  incapacitated  after  twenty  years'  service 
and  any  teacher  on  reaching  the  age  of  fifty-eight 
years,  if  a  man,  and  fifty  years,  if  a  woman,  after 
thirty  years'  service.   Pensions:    Quarterly,  one- 


teachers'  RETIREIIENT  FUNDS  i8i 

eighth  of  average  annual  salary  for  last  five  years' 
service,  no  quarterly  payment  to  exceed  one  hundred 
dollars;  provided  that,  if  the  average  salary  was  one 
thousand  dollars  or  more,  the  quarterly  payment  may 
not  exceed  one  hundred  and  twenty-five  dollars. 
Provi^fon  is  also  made  that  if  the  fund  is  insuflicient 
to  pa\-  all  pensions  in  full,  they  shall  be  prorated; 
also  tluct  a  teacher  retired  from  the  service  prior  to 
July  I,  1908,  .md  subsequent  to  July  i,  1902,  shall 
receive  a  pension  of  one-fourth  of  the  average  annual 
salary  for  the  I  ist  live  >ears  of  service.    The  super- 
intendent of  public  instruction  reports,  under  date 
of  February  6,  191 1,  that  sixty  teachers  were  placed 
on  the  pension  list  in  1908,  one  hundred  and  twenty 
in  1909,  and,  since  the  new  law  went  into  effect  in 
1910,  making  the  term  longer  and  the  provisions 
stricter,  ninety  names  have  been  added  to  the  list. 

WaskingUnt 

An  unsuccessful  attempt  was  made  to  have  a 
teachers'  retirement  fund  law  enacted  by  the  legis- 
lature in  the  early  part  of  191 1. 

West  Virginia 

There  is  no  law  in  the  state  relating  to  the  subject 
except  that,  iu  1Q07,  the  ledslature,  in  creating  the; 
Parkersburg  Independent  School  District,  made  u 


X8a    OLD  AOE  DEPENDENCY  IN  THE  UNITED  STATES 


provision  by  which  teachers  who  have  taught  for 
thirty  consecutive  years  may  be  placed  on  the  retired 
substitute  teachers'  Hst.  As  these  teachers  are  rarely 
ever  called  upon  for  service,  they  are  to  all  intents 
and  purposes  pensioners  on  three-fourths  of  the 
salary  received  in  their  last  year  of  active  service. 

Wisconsin 

The  law  of  1909  relating  to  school  teachers'  annuity 
and  retirement  fund  in  cities  of  the  first  class  is  appli- 
cable only  to  Milwaukee.  Its  main  provisions  are 
summarized  as  follows:  Management:  Board  of 
trustees,  composed  of  the  president  and  four  members 
of  the  board  of  school  director;  and  four  teachers. 
Ftmd :  i  per  cent  of  the  school  fund,  not  to  exceed  the 
amoimt  of  the  teachers'  contributions  during  the  pre- 
ceding year;  gifts  and  legacies;  interest  and  other 
appropriations  by  the  school  board,  and  annually 
the  sum  of  two  dollars  from  each  teacher's  salary 
for  twenty-five  years,  or  until  the  total  sum  of  five 
hundred  dollars  is  in  the  fund  to  the  credit  of  the 
teacher.  Beneficiaries :  Any  teacher  after  fifteen 
years'  service  who  sliail  become  incapacitated,  and 
any  teacher  who  has  reached  the  age  of  sixty-five 
and  has  taught  for  twenty-five  years,  fifteen  of  which 
shall  have  been  in  the  city  schools.  Pension :  Four 
hundred  dollars  per  year ;  provided  that  if  any  teacher 


TEACHERS'  EETUIEMENT  FLNDS  183 

has  not  paid  twenty-five  annual  contribuUons  to  the 
fund,  his  pension  shaU  be  as  many  twenty-fifths  of 
the  fuJl  amount  as  the  years  paid  bear  to  twenty- 
five;  or  such  teacher  may  make  cash  payments  of 

ton  dollars  per  month  or  any  mulUple  thereof  untU 
the  total  to  his  crlit  in  tlie  lund  is  five  hundred  dol- 
lars.  It  i.  also  provided  that,  in  case  any  teacher 
withdraws  or  dies  before  becoming  a  pensioner,  the 
amount  of  his  .  ontribu  ions  shall  be  refunded. 

At  the  session  of  the  lc,i,'islature  in  iqti,  a  law  was 
passed  applicable  to  the  entire  state,  establishing  the 
teachers'  insurance  and  retirement  fund.  JVIanage- 
ment :  A  board  of  trustees  consisting  of  fuv  members 
of  which  the  state  treasurer  and  the  state  superin- 
tendent of  public  instruction  are  ex  officio  members  • 
and  three  members,  one  of  whom  m-st  be  a  worn 
to  be  elected  by  the  members  of  the  Teachers'  Ins. 
ance  Retirement  Fund  at  the  annual  mceUng  of  the 
Wisconsin  State  Teachers' Assoda-'-n.   Fui  .:^'The 
state  treasurer  shall  annuaUy  se.  ..side  from  that 
portion  of  the  scliool  fund  known  as  the  'seven- 
tenths  mill  tax.'  or  from  any  other  general  state 
tax  levied  for  the  support  of  state  schools,  ten  cents 
for  each  person  of  school  age  in  this  state";  assess- 
ments on  salaries  of  teachers  within  the  state  at  the 
time  of  the  passage  of  the  act  who,  before  September  i, 
1912,  elect  to  come  under  its  pro^^sions  and  on  the 


l84    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

salaries  of  all  persons  who  become  teachers  in  the 
public  schools  after  September  i,  191 1 ;  these  assess- 
ments to  be  as  follows:  i  per  cent  per  annimi,  or 
not  more  than  fifteen  dollars  per  year,  for  each  of  the 
first  ten  years  of  service ;  and  2  per  cent  per  annimi, 
or  not  more  than  thirty  dollars  per  year,  for  each  suc- 
cessive year  of  service  until  the  teacher  shall  have  had 
a  total  of  twenty-five  years  of  teaching  service,  where- 
upon the  assessment  shall  cease;  also  such  donations, 
legacies,  or  other  moneys,  together  with  the  interest 
on  all  moneys  coming  into  the  fund.  Beneficiaries : 
Any  teacher  who  has  been  in  the  service  for  twenty- 
five  years,  eighteen  of  which  must  have  been  in  the 
pubhc  schools  nf  the  state,  or  any  teacher  who  has, 
after  eighteen  years'  service  in  the  state,  become  per- 
manently incapacitated.  Pensions  :  An  annual  allow- 
ance equal  to  twelve  dollars  and  fifty  cents  for 
each  year  of  service  as  teacher;  provided  that  such 
annuity  shall  not  exceed  four  hundred  and  fifty 
dollars.  However,  in  case  any  teacher  has  not  paid 
into  the  fund  the  amount  required  for  twenty-five 
years,  the  deficiency  shall  be  deducted  from  the  first 
aimuity  or  the  teacher  may  make  up  the  deficiency  by 
a  cash  payment.  It  is  also  provided  that  any  teacher 
ceasing  service  in  the  state  before  becoming  entitled 
to  retirement  for  service  or  disability  may  receive  a 
refund  of  one-half  the  amount  to  his  credit  in  the 


teachers'  retirement  funds  185 

fund,  without  interest.  Provision  is  also  made  for 
ratably  reducing  the  annuities  whenever,  in  the  judg- 
ment of  the  trustees,  the  condition  of  the  fund  shall 
make  such  scaling  necessary. 

Wyoming 

There  is  no  teachers'  retirement  fund  law  on  the 
statute  books. 

Porto  Rico 

There  was  an  interesting  system  for  teachers* 
pensions  in  operation  on  the  island  at  the  time  of  the 
American  occupation,  which  is  described  in  a  letter 
from  the  Commissioner  of  Education,  dated  San  Jose, 
March  16,  191 1,  from  which  the  following  quotations 
are  made:  "On  February  10,  1894,  the  Spanish 
Cortes  issued  a  Royal  Decree,  establishing  a  fund 
under  the  name  of  '  Derechos  Pasivos  del  Magisterio 
de  Primera  Ensenanza  de  Cuba  y  Puerto  Rico,' 
which  took  effect  in  Porto  Rico  the  first  of  July, 
1894.  This  fund  was  made  up  as  follows :  From  a 
discount  of  3  per  cent  on  the  salaries  of  the  teachers 
who  were  employed  permanently;  a  discoimt  of  10 
per  cent  on  the  amount  appropriated  for  school 
material ;  50  per  cent  on  the  salaries  of  the  teachers 
who  were  employed  temporarily,  because  these, 
being  substitutes,  only  received  half  salary,  the  other 
half  being  turned  over  to  the  Pension  Fund;  anc^ 


l86    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

finally,  loo  per  cent  on  the  salaries  of  such  teachers 
whose  schools  were  vacant,  that  is  to  say,  the  whole 
amount,  assigned  in  the  budget  for  the  teacher  of  a 
school  which  was  closed,  was  credited  to  the  fund. 
With  these  four  discounts,  by  means  of  a  carefully 
detailed  ordinance,  teachers  were  superannuated  after 
a  certain  number  of  years  of  service,  and  the  wives 
and  children  of  the  teachers  who  died  during  service 
'vere  pensioned.  Moreover,  the  amount  of  four 
thousaad  dollars  was  appropriated  annually  in  the 
budgets  of  Torto  Rico  as  a  subsidy  fund."  This  law 
was  abrogated,  however,  by  the  American  School  Law, 
which  took  effect  July  i,  1899;  and  in  1905  a  board 
of  trustees  was  created  by  legislative  enactment  to 
take  charge  of  and  administer  the  remaining  funds. 

The  Carnegie  Foundation  for  the  Advancement  of 
Teaching 

The  plans  already  summarized  are  such  as  relate 
to  the  establishment  and  operation  of  retirement  or 
pension  fxmds  for  teachers  in  the  public  schools  of 
the  various  states,  —  elementary,  intermediate  and 
high  schools.  There  remains  to  be  considered  the 
establishment  of  a  pension  system  for  the  benefit 
of  teachers  in  the  higher  institutions  of  learning,  — 
colleges  and  universities,  —  established  through  the 
beneficence  of  Andrew  Carnegie. 


teachers'  retirement  funds 


187 


In  the  early  part  of  1905,  Mr.  Carnegie  made  the 
announcement  that  he  intended  to  set  aside  ten  milh'on 
dollars  in  guaranteed,  interest-bearing  securities,  the 
income  of  which  should  be  devoted  to  the  establish- 
ment of  teachers'  retirement  salaries  as  a  means  of 
advancing  the  cause  of  higher  education.  The  rules 
published  by  the  Foundation,  in  1910,  contain  the 
following  statement :  — 

The  aim  of  the  founder  in  the  creation  of  this  Foundation 
is  dearly  expressed  in  the  act  of  incorporation  passed  by  the 
Congress  of  the  United  Slates,  and  approved  by  the  President, 
March  10,  1906,  in  the  following  paragraphs  (Section  3  (a)  and 

(b)):~ 

Seciion  2.  That  the  objects  for  which  said  corporation  is 

incorporated  shall  be  — 

(a)  To  receive  and  maintain  a  fund  or  funds  and  apply  the 
income  thereof  as  follows :  — 

To  provide  retiring  pensions,  without  regard  to  race,  sex, 
creed,  or  color,  for  the  teachers  of  universities,  colleges,  and 
technical  schools  in  the  United  Slates,  the  Dominion  of  Canada, 
and  Newfoundland,  who,  by  reason  of  old  age,  disabiUty,  or 
other  suflScient  reason,  shaU  be  deemed  entitled  to  the  assist- 
a  nee  and  aid  of  this  corporation,  on  such  terms  and  conditions, 
however,  as  such  corporation  may  from  time  to  time  approve 
and  adopt :  Provided,  however,  That  the  said  retiring  pensions 
shall  be  paid  to  such  teachers  only  as  are  or  have  been  con- 
nected with  institutions  not  under  control  of  a  sect  or  which 
do  not  require  their  trustees,  their  officers,  faculties,  or  stu- 
dents (or  a  majority  thereof)  to  belong  to  any  specified  sect, 
and  which  do  not  impose  any  theological  test  as  a  condition  of 
entrance  th«ein  or  of  connection  therewith. 


l88    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

(b)  In  general,  to  do  and  perform  all  things  necessary  to 

encourage,  uphold,  and  dignify  the  profession  of  the  teacher 
and  the  cause  of  higher  education  within  the  United  States, 
the  Dominion  of  Canada,  and  Newfoimdland  aforesaid,  and  to 
promote  the  objects  of  the  Foundation,  with  fuU  power,  how- 
ever, to  the  trustees  hereinafter  appointed  and  their  successors 
from  time  to  time  to  modify  the  conditions  and  regulations 
under  which  the  work  shall  be  carried  on,  so  as  to  secure  the 
application  of  the  funds  m  the  manner  best  adapted  to  the 
conditions  of  the  time:  And  provided,  That  such  corporation 
may  by  a  vote  of  two- thirds  of  the  entire  number  of  trustees 
enlarge  or  vary  the  purposes  herein  set  forth,  provided  that 
the  objects  of  the  corporation  shall  at  all  times  be  among  the 
foregoing  and  kindred  thereto. 

The  published  rules  state  that,  "Institutions  of 
higher  learning,  including  colleges,  technical  schools, 
and  universities,  whose  work  is  clearly  of  college  or 
university  grade,  may  be  admitted  to  participation 
in  the  benefits  of  the  retiring  allowance  system  sus- 
tained by  the  Foundation."  A  definition  of  the  word 
"college"  is  also  given  as  that  in  force  in  the  State 
of  New  York,  as  follows :  "An  institution  to  be  ranked 
as  a  college  must  have  at  least  six  (6)  professors  giving 
their  entire  time  tt>  college  and  imiversity  work,  a 
course  of  four  full  years  in  liberal  arts  and  sciences, 
and  should  require  for  admission  n  .-t  less  than  the 
usual  four  years  of  academic  or  high  school  prepara- 
tion, or  its  cnuivalent.  in  addition  to  the  preacademic 
or  grammar  school  studies."   In  the  case  of  a  tax- 


teachers'  retirement  funds  x8g 

supported  institution,  the  application  -ust  be  accom- 
panied by  the  approval  of  the  governor  and  of  the 
legislature  of  the  state  or  province  in  which  the  in  'i- 
tution  is  situated.     If,  in  the  opinion  of  the  trus- 
tees of  the  Foundation,  the  educational  efficiency  of 
any  such  instituUon  is  iiipaired  by  pohtical  con- 
trol or  interference,  they  may  decline  its  application. 
Provision  is  also  made  that   religious  denomina- 
tional schools  shall  be  excluded  from  participation 
in  the  fund,  if  they  apply  denominational  tests  in  the 
choice  of  trustees,  officers,  teachers,  or  the  admission 
of  students,  or  if  they  inculcate  in  the  students  denom- 
inational tenets  or  doctrines. 

The  rules  for  the  granting  of  retiring  allowances 
may  be  summarized  as  follows :  — 

Any  person  sixty-five  years  of  age  v.ho  has  b,d  not  iess 
tlian  fifteen  years  of  service  as  a  professor,  or  not  less  t'.an 
twenty-five  years  of  service  as  instructor  or  as  imtrurtor  and 
professor,  and  who  is  at  the  time  a  professor  or  an  instructor 
in  an  accepted  institution,  shall  be  entitled  to  ar  annual  retir- 
ing allowance  computed  as  follows:  — 

('0  For  an  acti^•e  pay  of  twelve  hundred  dollars  or  less,  an 
allowance  of  one  thousand  doUcrs,  provided  no  reUiing  aUow- 
ance  shaU  exceed  go  per  cent  of  the  active  pay. 

(b)  For  an  active  pay  greater  than  twelve  hundred  dollars 
the  retiring  allowance  shall  equal  one  thousand  doUars  in- 
creased by  fifty  doUars  for  each  one  hundred  dollars  of  active 
pay  in  excess  of  twelve  hundred  dollars. 

(c)  No  retiring  aUowance  shaU  exceed  four  thousand  doUars. 


19©    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

Provision  is  also  made  for  retirement  because  of  inai- 
padty,  after  twenty-five  years  of  service  as  professor, 
or  thirty  years  as  professor  and  instructor,  in  which 
case  the  retirement  allowance  is  computed  as  follows : — 

(a)  For  an  active  pay  of  twelve  hundred  dollars  or  less,  a 

rctiriiiK  allowance  of  eight  hundred  dollars,  provided  that  no 
retiring  allowance  shall  exceed  80  per  cent  of  the  active  pay. 

(b)  For  an  active  pay  greater  than  twelve  hundred  dollars, 
the  retiring  allowance  shall  equal  eight  hundred  dollars,  in- 
creased by  forty  dollars  fur  each  one  hundred  dollars  in  excess 
of  twelve  hundred  dollars. 

(c)  For  each  additional  year  of  service  above  twenty-five  for 
a  piofessor,  or  above  thirty  for  an  instructor,  the  retiring 
allowance  shall  be  increased  by  i  per  cent  of  the  active  pay. 

(d)  No  retiring  allowance  shall  exceed  four  thousand  dollars. 

Provision  is  also  made  whereby  a  widow  of  an 
eligible  beneficiary  may  receive  one-half  of  the  retir- 
ing allowance  to  whicli  Iicr  husband  was  entitled. 

Under  certain  conditions,  the  Foundation  will 
cooperate  with  institutions  on  the  accepted  Hst  in  the 
retirement  of  teachers  who  have  had  twenty-fi\e 
years'  service  as  professor,  or  thirty  years'  service  as 
professor  and  instructor,  but  who,  not  being  sixty- 
five  years  of  age,  are  not  eligible  for  retirement  imder 
the  first  above-mentioned  rule. 

In  all  cases,  years  of  leave  of  absence  are  to  be 
coimted  as  years  of  service;  provided  the  absence 
does  not  exceed  one  year  in  seven.  The  benefits  of 
the  Foundation  are  not  available  to  those  whose 


TEACBESS'  EETOEMENT  FUNDS  191 

active  service  ceased  before  April  16,  1905,  tlic  date 
of  the  founder's  originu"  letter  tendering  tlie  establish- 
ment of  the  fund,  or  to  the  teacher  wLo  continues  to 
give  any  time  to  the  work  of  teaching;  they  may, 
however,  be  extended  to  individual  professors  in  insti- 
tutions not  on  the  accepted  list,  witiiin  the  discretion 
of  the  Board  of  Trustees. 

The  list  of  accepted  institutions,  as  published  in 
November,  1910,  contains  the  names  of  seventy-one 
colleges  and  universities  in  various  parts  of  tiie  United 
States  and  Canada. 

The  financial  exhibit  of  the  Foundation,  as  contained 
in  the  Fifth  Annual  Report  for  the  fiscal  year  ending 
September  30,  19 10,  shows  a  total  income  for  the  year 
amounring  to  $543,881.20;  and  total  disbursements 
amounting  to  $538,148.07,  of  which  the  amounts  paid 
in  retiring  allowances  were  $325,199.02  to  professors, 
officers  and  widows  in  accepted  institutions,  and 
$144,635.28  to  like  beneficiaries  in  non-accepted  insti- 
tutions, making  a  total  of  $469,834.30  paid  in  retir. 
ment  aUowances.   The  expenses  for  tiie  year  were  as 
follows :  — 


Salaries  

Rent,  office  and  traveling  expenses 

Publication  

Study  of  professional  education  . 
Total  


$24,406.66 

11,342  49 
8,635.01 
2.3.920.61 


193    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

It  may  be  remarked  that  the  high  percentage  of 
administration  and  other  expenses  to  income  (13  per 
cent  for  the  fiscal  year  ending  September  30,  1910) 
is  justified  by  the  Board  of  Trustees  on  the  ground 
that  the  ultimate  purpose  of  the  Foundation  is  the 
advancement  of  "the  cause  of  higher  education"; 
and  the  expense  items  of  "publication"  and  "study 
of  professional  education"  are  directly  applicable 
to  this  purpose. 

The  following  table  shows  the  operation  of  the  fund 
as  to  beneficiaries,  for  the  year  ending  September  30, 
1910: *  — 


Ndhber  op 

AlLOWANl  KS 

IN  FORCK 

Total  Grant 

IN  Force 
Septeuder  30, 
igio 

Professors  and  officers  in  accepted  in- 

Prokssors  and  officers  in  unaccepted  in- 
Widows  of  professors  and  officers  in 
Widows  of  profcss(jrs  and  officers  in 

92 

40 
17 

*34S.370 
123,870 

36,750 
13,080 

$521,070 

The  general  average  for  retirement  allowance  for 

the  year  was  $1,628.41. 

*  Fifth  Annual  Report  of  the  Carnegie  Foundation  for  the  Advance- 
ment of  Teaching,  page  10. 


CHAPTER  VI 


MUNICIPAL  PROVISIONS 

T  -rTERS  of  inquiiy  addressed  to  the  PubKc  Safety 
Departments,  or  other  authoriUes  exercising  pubUc 
safety  functions,  in  all  the  large  cities  in  the  United 
States,  brought  the  information  that  the  movement 
for  pensions  for  worn-out  and  aged  employees  in  more 
or  less  hazardous  municipal  service  is  largely  recent. 
While  some  of  the  states  enacted  laws  thirty-five  or 
fo'-ty  years  ago,  making  it  possible  for  cities  to  pro- 
vide for  worn-out  employees  by  means  of  pensions; 
and  while  a  few  cities  took  early  advantage  of  such 
provisions,  our  American  cities  generally  have  been 
giving  attention  to  the  practical  working  out  of  this 
problem  only  m  very  recent  years. 

The  pension  laws  th'is  far  enacted,  however,  are 
available  for  only  two  classes  of  civic  employees; 
namely,  Police  and  Firemen.  The  Hmitation  has  been 
made  thus,  largely  because  of  the  general  acceptance 
of  the  fact  that  policemen  and  firemen  are  in  more 
hazardous  occupations  than  other  municipal  em- 
ployees. Indeed,  the  impression  seems  to  be  wide- 
spread that,  as  it  is  incumbent  upon  the  nation  to 


o 


193 


194    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

provide  pensions  for  the  soldiers  and  sailors  who 
hazard  their  lives  in  the  nation's  defense,  so  is  it 
incumbent  upon  the  cities  to  make  as  liberal  provision 
for  the  citizens  who  hazard  their  lives  in  the  protec- 
tion of  the  life  and  property  of  their  fellow-citizens. 
This  movement  is  now  showing  considerable  rapidity 
of  action ;  and  replies  from  many  cities  which  have 
not  yet  introduced  a  pension  system  for  policemen 
and  firemen  indicate  that  it  is  only  a  question  of  a 
short  time  until  every  city  of  any  considerable  size 
and  importance  throughout  the  land  will  make  pro- 
vision for  its  defenders  of  life  and  property  who  have 
been  worn  out  or  disabled  in  the  service. 

In  order  to  present  a  bird's-eye  view  of  what  the  cities 
are  doing  along  this  line,  an  analysis  of  the  provisions 
in  some  of  our  leading  cities  is  given  in  two  classes,  — 
A.  Police  Pensions,  and  B.  Firemen's  Pensions.  The 
claims  of  other  municipal  '  ployees  to  consideration 
along  pension  lines  will  l)e  presented  in  a  separate 
subchapter,  —  C.  Other  Municipal  Employees. 

A.  Police  Pensions 

The  sources  of  revenue  fcr  police  pensions  var\'  in 
some  degree  acc  jrding  to  the  size  and  circumstances 
of  the  city.  In  general,  however,  they  may  be  sum- 
marizeci  as  follows :  I'irst :  A  certain  percentage  of 
the  monc}  s  received  from  licenses  for  the  keeping  of 


MDNiaPAL  PROVISIONS  195 

places  where  spirituous,  malt  or  othtr  intoxicating 
liquors  are  wld ;  for  conducting  billiard  and  pool  rooms 
and  bowling  alleys;  for  handling  second-hand  merchan- 
dise and  junk ;  for  peddling  and  huckstering  through 
the  streets;  for  the  keeping  of  dogs;  for  carrying 
concealed  weapons;  and  for  the  holding  of  pubUc 
entertainments  such  as  plays,  exhibitions,  dances, 
etc.  Second:  The  proceeds  from  the  sale  of  unclaimed, 
lost  or  stolen  property.    Third:  Moneys,  gratuiUes. 
etc.,  received  by  policemen  in  the  discharge  of  their 
duty,  except  such  as  may  be  exempted  by  action  of  the 
police  authorities  in  special  instances;  forfeitures 
and  fines  imposed  upon  members  of  the  force  for  infrac- 
tion of  the  rules  or  for  une.xcused  absences.    Fourth  : 
Witness  and  other  fees  which  the  law  allows  police- 
men in  attendance  upon  trials.  Fifth  :  The  fines  and 
costs  imposed  by  courts  in  certain  specified  cases. 
Sixth:  Deductions  from  policemen's  salaries,  varying 
from  one-half  of  i  per  cent  to  2]  per  cent  of  monthly 
income. -usually  1  per  cent;  with  a  provision  that 
such  deductions  shall  not  exceed  a  certain  specified 
amount ;  as,  for  example,  a  maximum  of  fifteen  dollars 
per  month,  no  matter  what  the  salary  may  be.  It 
should  be  remarked  also  that,  in  a  few  instances  where 
the  association  is  voluntary,  membership  or  initia- 
tion fees,  together  with  stated  monthly  assessments, 
are  included  in  the  income;  and  in  some  cities  the 


196    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

privilege  is  given  by  the  association  rules  of  levyinp  ex- 
tra assessments  which,  however,  are  usually  limitetl  to 
certain  specified  amounts,  rarely  exceeding  five  dollars. 

The  provisions  for  retirement  and  pensions  in  the 
various  large  cities,  so  far  as  reported,  are  classified  as 
follows :  — 

Baltimore,  Md.  —  Any  member  of  the  department, 
after  ^ixhcn'yfars'  service,  may  be  retire]  on  account 
of  disability.  Any  member  may  be  ri'tired  at  any 
time  or  age  on  becoming  permanently  disabled  while 
in  the  actual  discharge  of  duty.  Pensions  amount  to 
one-half  of  the  amount  of  pay  received  at  the  time  of 
retirement. 

Boston,  Mass.  —  Any  member  of  the  police  force 
may  be  retired  at  any  *lme,  without  regard  to  length 
of  service,  on  presenting  a  written  certificate  of  the 
nhysician  to  the  board  of  health  showing  that  the 

icmber  is  permanentiy  incapacitated  for  service. 
VVhen  so  retired,  his  pension  is  one-half  the  amount  of 
salary  received  by  him  at  the  time  of  his  retirement. 
Any  member  who  has  served  fifteen  consecutive 
years,  and  less  than  twenty,  and  is  certified  by  the 
physician  to  the  board  of  health  to  be  permanently 
incapacitated,  mav  be  retired  on  a  pension  in  an 
amount  not  exceeding  one-third  of  his  annual  salary. 
Any  member  of  the  force  who  has  served  twenty  years 
or  longer  may  be  retired  at  his  own  request,  accom- 


VUNICIPAX,  PROVISIONS  197 

panied  by  a  certificate  of  the  physidan  to  the  board 
of  health  showing  that  he  is  totally  incapacitated  for 
police  service;  in  such  case,  his  pension  shall  be 
one-half  of  the  amount  of  salary  received  at  the  time 
of  retirement.   Any  member  of  the  force  who  has 
reached  the  age  of  sixty-five  shall  be  retired  on  one- 
half  the  amount  of  his  annual  salary;  provided, 
however,  that  soldiers  and  sailors  honorably  discharged 
from  the  War  of  the  Rebellion  shall  not  be  compul- 
sorily  retired  at  sixty-live  years  of  age.    On  the  other 
hand,  such  soldier  or  sailor  who  has  reached  the  age 
of  sixty  years,  without  regard  to  the  length  of  his 
service,  or  who  has  served  twenty  years,  without 
regard  to  his  age,  shall  be  retired  if  he  so  requests, 
with  a  pension  equal  to  one-half  the  amount  of  his 
salary.   Any  member  who  has  reached  the  age  of 
sixty  years,  and  served  not  less  than  twenty-live, 
shaU  be  retired  at  his  own  request,  on  an  annual 
pension  equal  to  one-half  of  his  salary  at  the  time  of 
his  retirement.   There  is  also  in  Boston  what  is 
known  as  the  PoUce  Charitable  Fund,  which  amounts 
to  over  two  hundred  thousand  dollars,  and  which  is 
carefully  invested  and  the  income  used  for  the  relief 
of  members  of  the  poHce  force  honorably  discharged 
because  of  sickness,  age,  or  disability,  in  consequence 
of  whi  -h  they  may  be  in  necessitous  chcumstances. 
On  September  i,  1909,  sixty-five  beneficiaries  of  this 


198    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

fund  were  reported,  to  whom  the  average  monthly 
payment  was  $9.67. 
Camden,  NJ.  —  On  August  31,  1911,  the  City 

Council  decided  to  take  advantage  of  the  general  act 
of  the  legislature  which  permits  the  establishment  of 
police  retirement  funds  within  the  state,  under  which, 
those  in  the  service  for  twenty  years  and  who  have 
reached  the  age  of  sixty,  or  in  tlie  service  twenty-five 
years,  and  have  reached  the  age  of  fifty-five,  may  be 
retired  on  pensions;  provided,  however,  each  pen- 
sioner shall  have  contributt;d  to  the  establishment 
and  maintenance  of  the  fund  i  per  cent  of  his  salary 
lor  a  certain  definite  period. 

Chattanooga,  Tenn.  —  The  fund  here  is  maintained 
for  the  joint  benefit  of  police  and  firemen.  After 
twenty  years'  service  in  either  department,  a  member 
may  retire  on  half  pay  if  he  so  request.  After  twenty 
years'  service  and  not  volimtarily  retired,  he  is  retired 
on  two-third's  pay  on  becoming  disabled  in  the  active 
discharge  of  duty. 

Chica-o,  III.  —Tn  1887  the  state  of  Illinois  enacted 
a  police  pension  fund  law  for  cities,  villages  and  incor- 
porated towns.  The  fund  is  under  the  control  of  a 
board  of  five  trustees.  Any  policeman  may  retire 
after  twenty  years'  service  on  a  pension  eo,ual  to  one- 
half  the  amount  of  salary  received  for  one  year  prior 
to  retirement ;  provided  that  the  maximum  shall  not 


MUNICIPAL  PROVISIONS  199 

exceed  nine  hundred  dollars  or  the  minimum  be  less 
than  six  hundred  dollars  per  year.   In  case  of  the 
pensioner's  death,  his  pension  shall  be  continued  to 
his  dependent  beneficiaries.   Any  policeman  may  be 
retired  either  voluntarily  or  by  compulsion  on  be- 
coming physically  incapacitated  for  duty;  in  which 
rase,  the  rules  governing  such  pension  are  the  same  as 
for  service  retirement.    The  law  also  provides  for 
the  pensioning  of  police  matrons,  practically  in  the 
same  manner  and  on  the  same  conditions  as  above 
summarized  for  policemen.    It  is  provided,  however, 
that  if  there  are  not  sufficient  moneys  in  the  pension 
fund  of  the  city  to  pay  all  pensions  in  full,  they  may 
be  prorated.    It  is  to  be  regretted  that  there  are  no 
complete  statistical  records  showing  the  operation  of 
this  fund  in  the  city  of  Chicago. 

Cincinmii,  Ohio.  —  The  management  of  the  pen- 
sion fund  is  under  a  board  of  trustees  composed  of 
the  director  of  the  department  of  public  safety  and 
five  members  elected  by  the  policemen.  The  support 
of  the  fund  by  policemen  seems  to  be  volimtary; 
that  is  to  say,  each  member  of  the  force  who  expects 
to  become  a  beneficiary  of  the  fund  must  contribute 
one  dollar  per  month  to  its  support.  After  having 
served  twent\--five  consccuti\-c  years,  and  on  reach- 
in,<;  the  age  of  fifty-fi^•c.  such  member,  on  being  honor- 
ably retired  by  the  director  of  public  safety,  and  on 


200    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

the  approval  of  the  trustees  of  the  police  relief  fund, 
shall  receive  a  pension  of  fifty  dollars  per  month; 
likewise,  any  member  may  be  retired  at  any  time  on 
the  same  pension  when  permanently  disabled.  Any 
member  who  has  served  for  fifteen  consecutive  years 
or  more,  and  is  then  retired  because  of  incapacity,  may 
receive  a  pension  equal  to  two  dollars  per  month  for 
each  year  of  consecutive  service ;  provided  the  pen- 
sion in  such  case  shall  noc  exceed  the  sum  of  forty-five 
dollars  per  month. 

Cleveland.  Ohio.  —  The  management  of  the  pen- 
sion fund  is  vi.'sted  in  a  board  of  trustees,  consisting 
of  the  city  ofiicer  having  charge  of  the  police  depart- 
ment and  five  members  elected  by  the  department. 
Members  who  are  disabled  after  fifteen  years'  service 
and  were  retired  prior  to  August  i,  1910,  receive  the 
following  annuities:  superintendent  of  police,  $950; 
inspector  of  police,  $870;  captains,  secretary  of 
police  and  police  surgeons,  each  $780 ;  lieutenants  and 
detectives,  $720;  sergeants,  $660;  patrolmen,  $600. 
Those  who  retire  after  August  i,  1910.  with  twenty- 
five  years'  consecutive  service  to  their  credit,  receive  a 
monthly  pension  according  to  the  fallowing  schedule : — 

Chief  $125.00  j  Surgeon   100.00 

Inspector    ....  118.00  j  Lieutenant  ....  7S-00 

Captain  100.00  ;  Son^cn.nt   68. 00 

Secretary-    ....  100.00 1  Patrolman    ....  63.25 


MUNICIPAL  PROVISIONS 


20I 


It  is  also  provided  that  any  member  incapacitated 
while  in  the  performance  of  his  duty,  or  by  sickness, 
after  fifteen  years  of  consecutive  service,  may  be 
retired  and  pensioned  according  to  the  last  afore- 
mentioned schedule.  Any  member  discharged  after 
twenty  years'  consecutive  service,  provided  the  dis- 
charge was  not  based  upon  dishonesty  or  a  felony, 
may  be  retired  upon  one-half  of  the  amount  specified 
in  tl.e  above  schedule.  It  is  also  provided  that  pen- 
sions may  be  paid  widows  and  orphans  under  certain 
circumstances.  The  annual  report  of  the  trustees 
A  the  Police  Fimd  of  the  City  of  Cleveland  for  the 
year  1910  shows  that  the  balance  on  hand  at  the 
beginning  of  that  year  was  $40,706.35.  The  receipts 
during  the  year  were  $70,622.85,  making  total  cash 
resources  of  $111,329.20.  The  pensions  paid  during 
the  year  amoimted  to  $68,487.05.  The  board  also 
reports  a  total  of  $213,534.72  assets,  all  of  wL.ch, 
except  $25,534.72  cash,  are  safely  invested. 

Columbus,  Ohio.  —  The  management  and  resources 
of  the  fund  are  practically  the  same  as  for  Cincinnati 
and  Cleveland.  The  allowances,  however,  in  case 
of  retirement  are  as  follows :  For  total  disability  re- 
ceived in  the  performance  of  service,  or  as  a  conse- 
quence of  accident  or  disease,  after  ten  years  of 
service,  fifty  dollars  per  month;  for  a  disability  dis- 
qualifying the  member  from  the  performance  of  police 


202    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


duty,  but  not  such  as  to  prevent  him  from  entering 
other  gainful  employment,  thirty  dollars  per  month. 
Any  member  disqualified  by  physical  condition,  after 
twenty  years'  service,  shall  be  retired  on  a  monthly 
pension  of  fifty  dollars.  Any  member  may  retire 
after  twcnty-five  years'  service,  whether  disabled  or 
not,  on  a  monthly  pension  of  tifty  dollars.  Provision 
is  also  made  for  pensions  to  widows  and  orphans  of 
deceased  members. 

Toledo,  Ohio.  —  The  management  and  source  of 
the  fund  are  as  described  for  Cincinnati  and  Cleve- 
land. Any  member  of  the  force  may  retire  after 
twenty-five  years'  consecutive  service,  or  after  fifteen 
years'  consecutive  service,  if  then  incapacitated  by 
reason  of  accident  in  the  actual  performance  of  duty ; 
and  receive  a  pension  in  monthly  instalments  aggregat- 
ing the  yearly  amoimts  in  the  foUowing  schedule :  — 

Chief   $950 

ispector   870 

Captains,  lieutenants,  detectives  and  secretary  780 

Sergeants   720 

Patrolmen   660 

Des  Moines,  Iowa.  —  Any  member  of  the  depart- 
ment who  becomes  permanently  disabled  while  in  the 
discharge  of  his  duties,  or  who,  after  twenty-two  years' 
service,  the  last  five  of  which  have  been  continuous, 
becomes  incapacitated,  or  who  has  reached  the  age  of 


MUNICIPAL  PROVISIONS  203 

fifty-five  years,  may  be  retired  on  a  monthly  pension 
equal  to  one-half  of  tlie  monthly  salary  drawn  by 
him  at  the  time  of  his  retirement. 

Detroit,  Mich. —The  pension  fund  was  established 
by  act  of  legislature  in  1893,  and  amended  in  1805 
and  1901.  Retirements  are  allowed  for  incapacity 
after  twenty-five  years'  duty;  and  monthly  pay- 
ments are  as  follows:  Superintendent,  S75;  chief  of 
detectives,  $70;  deputy  superintendents,  S65 ;  cap- 
tains, I60;  Heutenants,  $55;  sergeants,  S50;  and 
other  members  receiving  upwards  of  one  thousand 
dollars  annually,  $50;  aU  other  members,  $45. 

Indianapolis,  Ind.  — The  law  under  which  the 
pension  fund  is  created  and  maintained  was  passed  in 
1899  and  amended  in  1903,  1905  and  1907.   It  is 
applicable  to  cities  of  the  first  and  second  classes  and 
also  to  such  other  cities  as  may  adopt  it  by  ordinance. 
The  board  of  trustees  is  composed  of  nine  members, 
—  the  mayor,  city  treasurer,  chief  of  police,  and  six 
members  of  the  police  force  to  be  elected  by  the  police- 
men.   Any  one  retired  on  account  of  disability  at 
any  age  shall  receive  a  pension  of  not  less  than  ten 
dollars  nor  more  than  fifty  dollars  per  month.  Any 
member  who  has  been  on  the  force  for  twenty  years 
and  less  than  twenty-live  may.  on  his  written  appli- 
cation, be  retired;  and  any  member  in  the  ser\'ice  for 
twenty-five  years  or  more  shall  be  so  retired  on  written 


204    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

applicatio.  ;  and  members  so  retired  shall  receive  a 
pension  of  fifty  dollars  a  month.  Provision  is  also 
made  for  extending  the  pension  provisions  to  surviv- 
ing widcws  md  orjihans.  It  is  al^'^  provided  that 
any  mei.  ler  dismissed  for  any  cause  other  than  the 
commission  of  a  felony,  after  having  been  in  the  serv- 
ice for  twenty  years  or  more,  shall  be  entitled  to  a 
pension  of  not  less  than  fifteen  nor  more  than  thirty 
dollars  per  month.  A  statement  of  the  condition  of 
the  pension  fimd  on  January  i,  191 1,  shows  that  the 
total  amount  of  cash  and  invested  assets  is  $121,927.89. 
The  amount  of  pensions  paid  during  1910  was  $14,471 ; 
and  the  receipts  for  that  year  were  $29,999.15. 

Kansas  City,  Mo.  —  The  pension  fvmd  in  this  dty 
is  operated  as  a  part  of  the  police  relief  association, 
estahhshed  at  the  close  of  tqo8.  Any  member  being 
discharged  or  resigning  from  the  police  force  within 
one  year  or  more  after  joining  the  association  is 
entitled  to  receive  the  amount  of  his  initiation  fee 
and  all  dues  paid  during  the  first,  second  and  third 
years.  For  each  year  in  excess  of  three  years,  he 
shall  receive  a  pension  at  the  rate  of  eighty  dollars 
per  year  for  such  years ;  provided,  however,  that  in 
no  event  shall  he  receive  an  aggregate  of  more  than 
twelve  hundred  dollars.  Provision  is  also  made  for 
the  payment  of  funeral  benefits  in  case  of  a  member's 
death. 


MUNICIPAL  PROVISIONS  20$ 

MUwaukee,  Wis.—'lhe  pension  fund  was  estab- 
lished in  pursuance  of  legislative  acts  in  1903  and 
1907.   The  management  is  under  the  control  of  a 

board  of  trustees,  composed  of  the  mayor,  treasurer, 
comptroUer,  chief  of  police  and  three  members  elected. 
Any  member  may  be  retired  on  account  of  disability 
at  any  time  on  a  monthly  pension  equal  to  one-half 
of  his  monthly  salary  at  the  time  of  retirement. 
After  twenty-two  years  of  consecutive  service,  the 
member  may  be  likewise  retired  on  a  pension  of  equal 
amount.  Provision  is  also  made  for  pensions  to 
widows  and  orphans  of  deceased  members  of  the  force. 

New  Orleans,  La.  —  The  pension  fund  was  estab- 
Ushed  in  pursuance  of  legislative  enactment  in  1904. 
Any  member  permanently  disabled  while  in  the  actual 
performance  of  duty,  or  after  twenty  years'  service, 
on  reaching  the  age  of  sixty  years,  may  voluntarily 
retire  and  receive  a  pension  not  exceeding  one-half 
the  annual  salary  at  the  time  of  retirement.  Pro- 
vision is  also  made  for  pensioning  widows  and  orphans 
of  deceased  members.  It  is  also  provided  that,  in 
case  the  fund  is  not  sufficient  at  any  time  to  meet 
accruing  obligations,  the  pensions  shall  be  scaled 
accordingly. 

Nru>  York,  N.V.  —  A  member  may  be  retired  at 
any  age  for  disability  resulting  from  the  actual  per- 
formance of  duty;  and  one  so  retired  receives  a  pen- 


206    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


sion  of  not  more  than  one-half  nor  less  than  one-third 
of  his  salary  at  the  time  of  retirement.  A  member 
superannuated  after  ten  years',  or  less  than  twenty- 
five  years',  ser\-icc  maybe  pensioned  at  the  same  rate. 
Any  member  who  has  reached  the  age  of  fifty-five 
years,  after  serving  fur  twenty  years,  may  be  retired 
upon  liis  own  request,  which  must  be  accompanied  by 
a  surgeon's  certificate  of  nermanent  disability;  the 
pension  in  such  case  is  not  less  than  one-half  of  his 
salary  at  the  time  of  retirement.  Any  member  who 
has  reached  the  age  of  fifty-five,  after  twenty-five 
years  of  service,  is  retired  on  half  pay,  if  he  requests 
such  retirement,  whether  disabled  or  not ;  provided, 
however,  that  any  veteran  of  the  Civil  War  who  has 
reached  the  age  of  sixty  years  may  be  retired  on 
half  pay,  without  taking  into  -iccount  the  length  of 
his  service  on  the  force. 

Omaha,  Neb.  —  Provision  is  made  under  the  state 
law  for  pensions  to  members  of  the  department  who 
have  reached  the  age  of  fifty  and  served  for  twenty 
years ;  also  for  those  who  are  incapacitated  by  acci- 
dent in  the  performance  of  duty.  The  pension  fixed 
in  each  case  is  forty  dollars  per  month. 

Philadelphia,  Pa.—Thv  City  of  Philadelphia  Po- 
Hce  Pension  t'und  Association  was  established  Dc  em- 
ber 5,  1907.  A  member  who  has  reached  the  age 
of  fifty  and  has  been  in  the  service  for  at  least  twenty 


KUNICIPAL  PSOVISIONS  207 

years  may  be  placed  on  the  pension  list  and  receive 
2  J  per  cent  of  his  average  monthly  pay  at  the  time  of 
retirement,  multiplied  by  the  total  number  of  months 
he  has  been  in  the  service ;  provided  that  no  allow- 
ance shall  be  made  for  excess  of  service  over  twenty 
years.   And  provided,  further,  that,  if  his  average 
monthly  pay  was  in  excess  of  two  hundred  and  fifty 
dollars,  such  excess  shall  not  be  taken  into  account  in 
computing  his  pension.    A  member  who  has  become 
totally  disabled  by  injury  received  in  the  discharge  of 
his  duty  may  be  pensioned  in  like  manner  and  for  a 
like  '      >nt.    Pro\-ision  is  also  made  for  scaling  pen- 
sions       .-e  the  fund  is  not  sufficient  to  pay  them  all 
in  full;  also  for  the  continuing  of  pensions  under 
certain  circumstances  to  dependents  of  deceased  mem- 
bers. 

Providence,  /?./.  — Members  may  be  pensioned 
for  permanent  disability,  the  amount  of  pension  not 
to  exceed  50  per  cent  of  the  monthly  salary  paid  at 
the  time  of  retirement.  Should  the  fund  not  be  suffi- 
cient to  meet  all  payments  in  full,  the  pensions  are 
prorated  accordingly. 

Richmond,  Va.—Thc  pension  fund  is  operated 
through  a  police  benevolent  association.  Pensions 
are  granted  on  account  of  disability  or  old  age ;  and 
the  amount  is  fixed  from  time  to  time,  as  the  condition 
of  the  pension  fund  will  warrant;  but  when  such 


ao8    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

amount  is  once  fixed  in  the  case  of  any  individual 
retiring  member,  it  is  not  changed  unless  a  general 
readjustment  b  made  necessary  by  the  demands  on 
the  fund. 

Rochester,  N.Y.  —  Members  may  be  retired  on  a 
pension  of  not  less  than  two  liundred  and  fifty  dollars 
nor  more  than  five  hundred  dollars  per  year,  if  per- 
manently disabled  after  fifteen  or  less  th;in  twenty 
years  of  service.  Any  member  may  retire  voluntarily 
after  twenty  or  more  years  of  service  and  receive  a 
pcnsitm  ecjual  to  one-half  of  his  salary  at  the  time  of 
his  retirement.  Provision  is  made  also  for  the  con- 
tinuance of  pensions  under  certain  circumstances  to 
the  widows  and  orphans  of  deceased  members. 

St.  Louis,  Mo.  —  The  police  relief  association  is 
conducted  in  accordance  with  the  law  enacted  in 
1879  and  1881.  Any  member  who  has  served  for 
twenty  years  may  be  retired  compulsorily  on  a  pen- 
sion of  one  thousand  dollars  per  year.  Any  member 
who  has  served  on  the  force  for  fifteen  years,  when  so 
retired,  receives  five  hundred  dollars  per  year;  and 
any  member  having  served  for  ten  years,  when  so 
retired,  shall  receive  a  pension  of  two  hundred  and 
titty  dollars  per  year.  Likewise,  any  member  per- 
manently incapacitated  from  injury  received  in  the 
performance  of  duty  may  be  retired  at  any  time  on 
one  thousand  dollars  a  year  pension;  provided,  in 


mmClTAL  PROVISIONS  309 

every  case,  that  any  member  who  was  formerly  a 
retired  member  of  the  St.  Louis  Police  Relief  Associa- 
tion, and  thereafter  should  become  a  member  of  this 
association,  shall  be  entitled  to  a  pension  from  this  asso- 
ciation in  an  amount  equal  to  the  difference  between 
the  amount  received  from  the  relief  association  and 
the  amount  he  would  have  been  entitled  to  had  he 
been  originally  a  member  of  this  association.  Pro- 
\  ision  is  also  made  for  certain  benefits  to  beneficiaries 
of  deceased  pensioners. 

San  Francisco,  Cal.  —  The  pension  fund  is  provided 
for  in  the  charter  of  the  city,  as  ratified  by  the 
people,  May  26,  1908,  and  as  amended  in  1903,  1907 
and  191 1.    The  pension  fund  is  ur.  er  the  control  of 
the  board  of  police  commissioners.    The  board  may, 
by  unam'mous  vote,  retire  any  member  of  the  depart- 
ment who  has  arrived  at  the  age  of  sixty-live  and  on 
physical  examination  is  found  to  be  incapacitated  for 
service.   No  pension,  however,  is  allowed  unless  the 
retired  member  has  been  in  the  active  service  for 
twenty  years  continuously  next  preceding  his  retire- 
ment.  The  amount  of  pension  is  one-half  of  the 
siilary  drawn  by  the  member  at  the  time  of  his  retire- 
ment.  Provision  is  also  made  for  monthly  pensions  to 
dependent  beneficiaries  of  deceased  members. 

Seattle.  Wash.  —  The  pension  fund  operates  under 
a  state  aw  applicable  to  cities  of  the  first  class.  Its 


2IO    OLD  AGE  D.'PENDENCy  IN  THE  UNITED  STATES 

management  is  in  the  hand?,  of  a  board  of  trust (  s, 
consisting  of  the  mayor,  clerk,  treasurer,  president  of 
city  count  il,  tom  llur  with  three  members  of  the  police 
force  elected  by  the  policeini'u.  Police  arc  retired  at 
the  age  of  .ixiy  after  having  servetl  twenty  years,  or 
at  any  time  in  c;  se  of  permanent  di.v.bility  resulting 
from  accident,  sickness  or  old  age;  and  the  pension 
allowed  in  each  case  is  an  r mount  equal  to  one-half 
of  the  salary  drawn  at  the  time  of  retirement. 

Spriugjkld,  III.  —  A  policeman  may  be  retired  after 
twenty  years'  aggregate  service  or  whenever  per- 
kTianently  disabled  while  in  the  performance  of  police 
duty;  and  his  pension  is  fixed  at  an  amount  not 
exceeding  one-half  of  the  salary  drawn  at  the  time  of 
his  retirement ;  but,  in  no  case,  to  be  more  than  nine 
hundred  dollars  or  less  than  six  hundred  dollars  per 
year. 

Springfield.  Mass. — On  reaching  the  age  of  sixty- 
five,  after  having  been  in  the  service  for  not  less  thar 
fifteen  years,  or  if  disal)lcd  at  any  age  after  twi-.ty 
years  ol  continuous  ser\-ice.  a  policeman  may  be 
retired  at  his  own  reciuest  or  if,  in  the  judgment  of  the 
board,  he  is  physically-  incapacitated  for  service ;  and 
the  pension  is  fixed  at  an  amount  equal  to  one-half  of 
the  salary  drawn  at  llic  time  of  retirement. 

Superior,  Wis.  —  the  police  pension  fund  is  imder 
the  direction  of  a  board  of  trustees,  consisting  of  the 


MUNICIPAL  PitOVISZONS  an 

mayor,  treasurer,  dty  comptroUer  or  dty  clerk,  the 
chief  of  poUce  and  three  members  of  the  poKce  depart- 
ment elected  by  the  policemen.  A  policeman  may 
he  retired  on  a  pension  equal  to  one-haM  of  his  monthly 
salary  when  found  to  be  permanently  disabled,  or 
fter  twenty-two  years'  service.  Provision  is  also 
made  for  pensions  to  be  paid  to  beneficiaries  of 
deceased  members. 

^  It  should  be  remarked  that  there  are  some  cities, 
like  Dallas,  Texas,  whose  charters  contain  provisions 
for  the  establishment  of  police  pension  funds;  but 
which  provisions  the  authorities,  for  one  reason  or 
another,  have  not  yet  placed  in  operation. 

B.  Firemen's  Pensions 

Information  concerning  firemen's  pension  funds 
was  gathered  by  the  same  process  as  that  used  in 
connecUon  with  the  presentaUon  of  the  police  pension 
systems;  and  many  of  the  observations  made  in  con- 
nection with  the  poUce  pension  systems  are  pertinent 
to  the  problems  connected  with  the  firemen's  pension 
systems. 

""he  revenue  for  the  creation  and  maintenance  of  the 
firemen's  pension  funds  is  not  altogether  uniform  in 
its  source ;  but  may  be  summarized  generally  as  being 
derived  from  a  certain  percentage  of  the  tax  income 
of  the  dty,  and  from  grants,  donations  and  devises 


212    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


to  the  fund  and  from  membership  fees  and  dues  of 
firemen, —  the  membership  fee  being  usually  five 
dollars  in  case  the  pension  fund  is  operated  through  a 
volimtary  association,  —  and  contributions  consist- 
ing of  deductions  from  salary  to  the  amount  usually 
of  I  per  cent  per  month. 

The  operation  of  the  pension  fimd  as  it  affects  fire- 
men in  various  cities  may  be  summarized  as  follows :  — 
Baltimore,  Md.  —  Any  member  of  the  force  may 
be  retired  because  of  permanent  disability,  after 
twenty  consecutive  years'  service ;  and  is  entitled  to 
a  pension  of  one-half  of  the  salary  drawn  at  the  time 
of  retirement. 

Boston,  Mass.  —  Retirement  is  permissible  after 
fifteen  years'  service  or  for  permanent  disability  in- 
curred in  the  line  of  duty.  The  fire  commissioner 
reports,  under  date  of  September  ii,  191 1,  that  there 
are  two  hundred  and  twelve  names  on  the  pension 
roU,  with  annuities  aggregating  $105,000. 

Chicago,  lU. — The  pension  system  is  operated 
imder  an  act  of  the  legislature,  passed  in  1877,  and 
amended  at  various  times  since.  This  act  is  applicable 
to  all  cities,  villages,  or  incorporated  towns  whose 
population  exceeds  five  thousand.  Under  it.  any 
member  of  the  force  who  has  been  in  the  service  for 
twenty-two  years,  or  more,  may  be  retired  on  one-half 
pay.   Provision  is  also  made  for  the  retirement  of 


MUNICIPAL  PROVISIONS  213 

permanently  disabled  ..mbers  at  the  same  rate  of 
pension,  without  .^^^rd  lo  Jen,  h  of  service.  The 
same  provisions  ^  Ay  io  Sj^riugLeld,  Peoria  and  other 
cities  in  Illinois. 

Cincinnati,  Ohio. -The  pension  fund  is  operated 
as  a  voluntary  association  under  the  administration 
of  a  board  of  trustees;  and  provides  for  retirement  at 
the  age  of  fifty-five  and  after  twenty-five  years'  serv- 
ice, or  for  retirement  at  any  time  for  physical  inca- 
pacity caused  by  the  service,  in  either  of  which  cases 
the  pension  is  fifty  dollars  per  month.  Members 
who  become  disabled  by  sickness  or  other  misfortune 
not  directly  connected  with  the  service,  may  be  re-' 
tired  on  graded  pensions,  as  follows :  ten  dollars  per 
month  for  servi.e  of  less  than  five  years;  twenty 
dollars  per  month  for  service  between  five  and  ten 
years,  and  thirty  dollars  per  month  where  the  service 
has  been  for  ten  years  or  more.    Prox-ision  is  also  made 
for  pensions  in  certain  cases  for  beneficiaries  of  the 
deceased  mei.ibers  of  the  force.    The  annual  state- 
ment of  the  pension  fund  for  tho  year  1909  shows  total 
receipts  for  that  year  (including  $10,392.89  balance 
from  the  previous  year)  amounting  to  $53,578.03. 
The  amount  expended  for  pensions  during  the  year 
was  $38,092.75. 

Cleveland,  Ohio.  —  The  annual  report  of  the  Fire- 
men's Pension  Fund,  dated  January  i,  shows 


214    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

seventy-seven  retired  firemen,  fifty-one  widows  of 
firemen,  and  twenty-foiir  orphans,  making  a  total  of 
one  hundred  and  fifty-two  pensioners  on  the  roll,  with 
expenditures  on  their  behalf  during  1910  amounting 
to  $66,158.53.  The  report  also  shows  a  total  amount 
of  $333,000  invested,  and  $i9,3S8.73»  cash,  as  the 
assets  of  the  fund.  No  data,  however,  concerning 
the  rules  and  regulations  have  been  received. 

Columbus,  OMo.  —  Pension  fund  is  under  the  direc- 
tion of  a  board  of  trustees,  consisting  of  five  members 
elected  by  the  active  members  of  the  fire  department. 
Any  member  of  the  force  becoming  disabled,  while  in 
performance  of  official  duties  at  any  time,  and  any 
member  becoming  disabled  '>y  accident  or  disease,  after 
twelve  and  one-half  years'  service,  is  entit  led  to  retire- 
ment on  montlily  pension,  as  follows:  (1)  II  such  dis- 
ability be  partially  permanent,  a  sum  to  be  determined 
by  the  board,  not  less  than  one  dollar  nor  more  than 
forty  dollars;  (2)  if  such  disability  be  totally  perma- 
nent, a  sum  of  fifty  dollars.  A  member  may  be  re- 
tired after  twenty-five  years'  service,  whether  dis- 
abled or  not,  on  a  monthly  pension  of  fifty  dollars. 
Provision  is  also  made  for  pensions  to  dependent 
beneficiaries  of  deceased  members. 

Dmver,  Colo.  —  The  fund  provides  that  a  member 
who  has  reached  the  age  of  fifty,  after  serving  twent> 
years,  may  be  retired  on  half  pay. 


MUNICIPAL  PROVISIONS  215 

Des  Moines,  Iowa. -Any  member  of  the  depart- 
ment permanently    ^--sabled  in  the  performance  of 
duty  may  be  retired  on  a  pension  equal  to  one-half 
of  the  amount  of  his  monthly  salary  at  the  date  of 
his  disability.    Any  member  may  be  retired  after 
twenty-two  years'  service,  of  which  the  last  live  shall 
be  continuous,  if  it  is  found  that  he  is  unable  to  per- 
form his  duties  or  on  reaching  the  age  of  lifiy-fue 
years;  and  shaU  thereafter  receive  a  pension  equal  to 
one-half  the  amount  of  salary  at  the  date  of  his  re- 
tirement.  Provision  is  also  made  for  extending  pen- 
sion allowances  to  dependents  of  deceased  members. 

Grand  Rapids,  Mich.  ~  Provision  is  made  for  the 
retiring  of  firemen  if  they  are  disabled  after  twenty- 
hve  years'  servi  . ;  and  the  amount  of  pension  is  one- 
half  the  salary  received  at  the  time  of  retirement. 

Kansas  City.  Mo. -The  pension  fund  is  operated 
in  accordance  with  the  provisions  of  a  law  of  the  state, 
which  became  efTectivc  March  23,  1903.    A  member 
disabled  while  in  the  discharge  of  duty,  or  at  the  age  of 
fifty  years,  after  having  served  twenty-two  years, 
may  be  retired  on  a  pension  of  forty-two  dollars  and 
fifty  cents  per  month.    Provision  is  also  made  for 
pensions  to  surviving  dependents  of  deceased  members 
MUwaukee,  Wis.  -  The  pension  fund  is  operated 
in  conformity  with  the  state  law  passed  in  1903  and  as 
amended  in  1907.  Any  member  of  the  department 


2l6    OLD  AGE  DEPENDENCY  I.N"  THE  UNITED  STATES 

who  is  disabled  while  on  duty  or  shall  bv.  ome  dis- 
abled by  sickness  or  accident,  after  ten  years'  service, 
or  after  twenty-two  years'  service,  whether  disabled 
or  not,  may  be  retired  on  a  monthly  pension  equal  to 
one-half  the  salary  drawn  at  the  time  of  his  retirement. 
It  is  also  provided  that,  in  case  the  fund  at  any  time 
shall  become  depleted  so  that  all  pensions  cannot  be 
paid  in  full,  they  shall  be  prorated  accordingly. 
Provision  is  also  made  for  extending  pension  allow- 
ances tu  dependents  of  deceased  members. 

Minneapolis.  Minn.  -The  pension  fund  is  oper- 
ated by  a  lirenicu's  relief  association  in  accordance 
with  the  p^->visions  of  a  state  law  enacted  in  1907, 
and  applicable  to  cities  of  more  than  fifty  thousand 
inhabitants.  Provision  is  made  for  a  pension  of  forty 
dollars  a  month,  in  case  of  total  disablement  while  in 
active  duty,  or  after  twenty  years'  service,  on  reaching 
the  age  of  fifty  years.  There  are  also  two  grades  of 
partial  permanent  disability  pensions,  depending  on 
the  degree  of  disability,  with  pensions  fLxed  at  twenty- 
five  dollars  a  month  and  fifteen  dollars  per  month 
in  the  two  grades,  respectively.  Dependent  relatives 
are  also  pensioned  for  a  limited  period. 

Nrd!  York,  N.Y. — Retirement  is  provided  for 
with  pension  allowances  fixed  as  follows :  For  perma- 
nent physical  disability  caused  o-  induced  by  the  actual 
performance  of  duty,  after  ten  years'  tonsecuLive  serv- 


MUNICIPAL  PROVISIONS  217 

ice,  or  whether  disabled  or  not,  after  twenty  years' 
service,  with  an  annual  pension  equal  to  one-half  of 
the  salary  at  the  time  of  retirement.  If  the  disability 
prior  to  ten  years'  service  was  not  caused  or  induced 
by  the  discharge  of  duty,  the  pension  is  computed  at 
one-third  of  the  salary  at  the  time  of  retirement. 

Omaha,  Neb.  —  The  pension  system  is  operated  in 
pursuance  of  a  law  enacted  by  the  state  in  1907  and 
applicable  to  cities  of  the  first  class.  It  provides  that 
firemen  may  be  retired  of  their  own  volition,  after 
twenty-one  years'  service,  and  ma}-  be  retired  at  any 
time  by  reason  of  permanent  disability,  occasioned 
by  the  discharge  of  duty ;  in  either  case,  the  pension 
to  be  50  per  cent  of  the  amount  of  salar>'  drawn  at 
the  time  of  retirement,  but  in  no  case  to  be  less  than 
fifty  dollars  per  month. 

Pittsburgh,  Pa.  —  The  system  of  pensions  is  oper- 
ated in  pursuance  of  an  ordinance  passed  by  the 
city  council  in  1886,  and  amended  from  time  to  time 
since.  Provision  is  made  for  retirement  after  twenty 
years'  service,  with  a  pension  computed  at  one-half  of 
the  monthly  salary  paid  at  the  time  of  retirement. 
In  case  of  permanent  physical  disability  resulting 
from  accident  while  on  duty,  a  member  receives  fif- 
teen dollars  per  week  for  fifty-two  weeks  and  there- 
after a  sum  of  one  thousand  dollars,  which  is  m  lieu  of 
ail  further  benefits.   It  is  provided,  however,  that  if 


2l8    OLD  AGE  DEPENDExNCV  IN  THE  UNITED  STATES 

the  fireman's  disability  fund  is  at  any  time  insuflSdent 
to  meet  all  claims  upon  it,  the  pension  and  disability 

allowances  shall  be  abated  accordingly. 

Richmond,  Va.  —  There  is  no  pension  or  retirement 
system  in  the  lire  department,  though  the  firemen's 
reh'ef  association,  which  is  a  voluntary  body,  has  been 
paying  one  thousand  dollars  in  a  lump  sum  to  the 
beneliciaries  of  a  fireman  who  is  killed  by  accident 
while  on  acti\e  duty,  and  live  dollars  per  week  to  a 
fireman  who  is  disabled  while  on  duty.    This  associa- 
tion was  formed  in  1896,  and  contains  among  its 
members  a  large  number  of  citizens  who  are  not  at  all 
connected  with  the  fire  department.   "It  does  not 
meet  with  the  approval  of  our  Board  of  Fire  Commis- 
sioners; and  it  is  optional  with  the  firemen  whether 
they  go  into  it  or  not ;  and  none  of  the  younger  mem- 
bers of  the  department  are  joining  it,  as  there  are  only 
about  twenty  thousand  dollars  in  the  treasury  and  a 
very  large  number  of  old  men  in  the  association." 
The  dues  are  fifty  cents  per  month,  and  each  member 
is  assessed  two  dollars  upon  the  death  of  a  fireman. 

Rochester,  N.  Y.  —  The  pension  system  was  inau- 
gurated in  May,  1908 ;  and  provides  that  any  mem- 
ber of  the  department  may  be  retired  for  permanent 
disability  after  fifteen  years'  membership;  in  which 
case,  his  pension  is  fixed  by  tlie  commission  of  public 
safety,  but  must  r  >i  be  le&s  than  two  hundred  and 


MUNICIPAL  PROVISIONS 


219 


fifty  dollars,  nor  more  than  five  hundred  dollars  per 
year.   If  the  member  has  served  for  twenty  >  ears,  he 
may  be  retired  upon  his  own  request ;  or,  if  disabled 
at  any  time  while  in  the  performance  of  duty,  he  may 
be  retired;  and,  in  either  case,  his  pension  must  be 
not  less  than  one-half  of  the  salary  he  was  drawing  at 
the  time  of  retirement.   Provision  is  also  made  for 
pensioning  widows  and  orphans  of  deceased  members. 
The  report  of  the  Fire  Pension  Fund,  dated  January  i, 
1911,  shows  that  the  balance  on  hand  January  i,  1910, 
was  $52.616.71 ;   and  the  receipts  during  the  year 
1910  were  $17,642.15  ;  while  the  pensions  paid  during 
that  year  amounted  to  $19,363.82.   The  balance  on 
hand  January  r,  191 1.  was  $50,884.54. 

St.  Louis,  Mo.  —  The  ordinance  creating  the  fire- 
men's fund  was  passed  by  the  municipal  assembly 
July  12,  1893  ;  ^nd  provides  for  retircnicnt  at  the  age 
of  fifty,  after  twenty-two  years'  service,  the  last  two 
years  of  which  shall  have  been  continuous ;  or  at  any 
time  for  permanent  disability  occasioned  by  the  serv- 
ice,—in  each  case,  the  pension  being  fixed  at  thirty 
doUars  per  month.  Dependent  widows  and  orphans 
of  deceased  members  of  the  department  are  also  pro- 
vided for. 

St.  Paid,  Minn.  — The  pension  system  is  oper- 
ated as  a  part  of  the  St.  Paul  Fire  Department 
Relief  Association,  which  was  incorporated  in  1892. 


Hi 


220    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

Under  this  sjrstem,  any  member  who  has  been  in  ac- 
tive service  for  twenty  years,  at  least  ten  of  which  have 
been  continuous  prior  to  retirement,  and  who  shall 

have  reached  the  age  of  fifty  years,  or  who  is  perma- 
nently incapacitated  while  in  the  discharge  of  duty, 
may  be  retired  on  a  pension  of  forty  dollars  per  month. 
Pensions  for  partial  permanent  disability  are  also 
provided  in  two  grades  of  twenty-five  dollars  and  fif- 
teen dollars  per  month.  Provision  is  made  for  pen- 
sions and  other  benefits  to  the  widows  and  orphans  of 
deceased  firemen. 

San  Francisco,  Cal.  -  The  firemen's  relief  fund 
was  provided  for  in  the  charter  of  the  city,  adoptcfl 
May  26,  1908 ;  and  provides  that  any  member  of  the 
department,  after  twenty-five  years'  continuous  serv- 
ice or  on  reaching  the  age  of  fifty-five,  after  having 
been  in  the  service  for  twenty  years  continuously, 
may  be  retired ;  or  any  member  who,  at  any  time, 
becomes  permanently  disabled  as  a  result  of  injury 
received  in  the  performance  of  duty,  may  be  retired 
on  a  pension  equal  to  one-half  the  salary  attached  to 
his  rank  for  three  years  prior  to  the  date  of  his  retire- 
ment. 

Springfield.  Mass. —  The  pension  fund  provides 
for  the  retirement  of  any  fireman  who  is  permanently 
disabled  while  in  the  discharge  of  his  duty,  or  who,  after 
twenty  consecutive  years,  becomes  incapacitated,  or 


MUNICIPAt  PSOVISIOira  221 

who  has  reached  the  age  of  sixty-five  years,  after  a 
period  of  not  less  than  twenty  consecutive  years  of 
service.  The  pension  is  fixed  at  one-half  the  salary 
drawn  at  the  time  of  retirement. 

Superior,  Wis.  —  The  pension  system  is  operated 
in  accordance  with  a  law  passed  for  cities  of  the  sec- 
ond, third  and  fourth  classes,  in  1898,  and  amended 
in  1907,  under  which  it  is  provided  that  any  member 
disabled  while  in  the  performance  of  duty,  and  any 
member  discharged  or  voluntarily  retiring  after 
twenty-two  years  of  service,  shaU  receive  a  pension 
monthly,  in  a  sum  equal  to  one-half  of  the  monthly 
salar}'  drawn  at  the  time  of  his  retirement.  Provision 
is  also  made  for  widows  and  orphans  of  deceased 
members. 

Seattle,  Wash.  —  The  firemen's  relief  and  pension 
fund  is  operated  in  conformity  with  a  state  law  which 
became  efTective  Mar  4,  1909,  which  provides  that 
on  becoming  physically  disabled  while  in  the  service, 
or  after  twenty  years  of  service,  or  on  reaching  the  age 
of  fifty-five  years,  a  member  may  be  retired  on  a 
monthly  pension  equal  to  one-half  the  amount  of 
salary  attached  to  his  rank  during  the  year  preceding 
retirement.  There  are  also  provisions  for  pension- 
ing dependent  members  of  deceased  firemen's  families. 

Tacoma,  Wash,  —  The  firemen's  relief  pension  fund 
was  organized  in  1902.   It  was  not,  however,  until  the 


222    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

passage  of  the  pension  law  in  1909  by  the  legislature 
that  the  pension  system  became  effective.  The  bene- 
fits under  this  law  are  the  same  as  those  described  for 

Seattle. 

Toledo,  Ohio.  —  The  firemen's  pension  fund  was 
tstablislic'd  May  17,  1904;  and  provides  for  retire- 
ment of  any  member  after  twenty-live  consecutive 
years'  service  or  on  becoming  permanently  incapac- 
itated. The  scale  of  monthly  pensions  for  retired 
members  is  as  follows:  Chief.  S80 ,  tirst  assistant 
chief,  S75 ;  second  assistant  chief,  S70 ;  superintend- 
ent and  district  chiefs,  S65  ;  secretary,  captains,  and 
enginetrs.  o;  assistant  engineers,  regular  firemen, 
and  operators,  $50.  Benefits  are  also  provided  for 
dependent  members  of  deceased  firemen's  families. 

Topeka,  Kansas.  —  The  firemen's  relief  associa- 
tion provide^  i  pension  for  incapacity  after  twenty 
years'  service,  —  the  amount  being  equal  to  one-half 
of  the  monthly  salary  received  by  the  member  at  the 
time  of  his  retirement. 

This  completes  the  investigation  made  concerning 
pensions  for  municipal  employees.  How  far  short 
American  cities  are  in  this  matter  may  be  readily  seen 
when  comparing  the  pension  systems  of  European 
cities.  That  the  comparison  may  be  graphic  and 
apparent,  the  following  table  of  pension  provisions 
of  European  cities  is  presented:  — 


MUNICIPAL  PROVISIONS 


223 


TABLE  VII 
McNiciPAL  Pensions  in  EinoraAN  Cims 


City 

0»ncr.«s  AND 

EuPLOVKkS 
PlCN!!IONABL£ 

Pk.vsions  rtiR 
1  iMMMrlrv 
Rl(.aki;lk>>s  of 
ACK 

OmprLSORY 

kLTIRKHENI 

Ikrlin   .  . 

All 
Ml 

\\s 

Vcs,  after  lo 

ClO 

B  rinin^^ham 
B'csiau 

All 
AH 

>  eu''i 
Yes 

Yes,  after  lo 

6s 

6« 
"5 

Dresden  . 

All 

years 
Yes 

\o  age  spt'c- 

I>!ini)urnh 
I  rinkt'ort  . 

All 
All 

>'es 

Yes,  after  lo 

ificd 
do  and  65  ' 

Li^•t•rpool  . 
London 

All 
AU 

years 

Yes 

Yes,  after  lo 

60 
60 

Lyons  .  . 

Al! 

years 
Yes,  after  lo 

60 

Madrid 

AU 

years 
Yes,  after  8 

60 

Manchester 

PernMiicnt 

years 
Yes 

Marseilles  . 
Nuremberg 

emploNccs 

Salarifd 
employees 
All 

Yea 
Yes 

60 

Par?     .  . 

All 

Yes,  after  to 

60 

Rotterda  m 
Stockholm 
Vienna  .  . 

All 
AU 
AU  officials 

vcars 

^■Js 

Yes 
Yes 

60  and  65  - 
60  and  65 

Ii  E  Requibed 

BEroKE  KCTIKC- 
MCMT 


as 

10 

20 
10 

30 

to 

10 
25 

40 
30 

30 


30 


X'arying  with 
grade 
30 

I  JS  and  20* 
30  <  and  35 


'  Age  sixty,  voluntary.  2  gjxty  for  women ;  sixty-five  for  men. 
'  Twenty-five  for  men ;  twenty  for  women.  *  For  firemen. 

C.    Other  Municipal  Employees 
The  cities  mentioned  in  the  foregoing  table  were 
selected  almost  at  random  and  may,  therefore,  be 


224    OLD  AGE  DEPEJTOENCV  IN  THE  UNITED  STATES 

regarded  as  typical  of  aU  large  municipalities  on  the 
European  Continent  and  in  the  British  Isles.  There 
is  hardly  a  city  in  aU  Europe  that  does  not  make 

proMsion  for  pensioning  all  of  its  employees  after 
they  have  served  a  given  number  of  years  and  have 
reached  the  age  of  sixty  or  sixty-iivc. 

It  is  true  that  many  of  these  cities  have  adopted 
the  contributory  system;  that  is  to  say,  employees 
are  compelled  to  submit  to  a  certain  deduction  from 
their  salaries  to  help  create  the  pension  fund,  which, 
however,  is  largely  subsidized  by  the  city.  There  is 
no  special  complaint  on  the  part  of  employees  against 
these  deductions ;  for  the  reason  that  the  beneficent 
results  are  daily  apparent  among  all  classes  of  retired 
municipal  employees.  It  must  be  noted,  however, 
that  at  least  one-half  of  the  European  cities  make  no 
deductions  whatever  from  their  employees'  wages 
for  the  purpose  of  creating  pension  funds.  In  these 
cities,  the  employees,  on  retirement,  receive  as  pen- 
sions what  are  justly  regarded  by  the  citizens  generally 
as  deferred  wage-dividends. 

From  an  economic  standpoint,  also,  this  system  in 
operation  in  European  cities  is  immeasurably  superior 
to  the  laisscz-fairc  system  m  vogue  in  American 
cities.  In  Pari,  ior  instance,  the  pension  for  a 
municipal  employee  who  has  reached  sixty  years  of 
age,  after  thirty  years  ol  ser\ice,  is  for  each  year  of 


MUNICIPAL  PSOVZSIOira  22$ 

service,  one-sixtieth  of  his  average  pay  during  the  last 
three  years  of  service.  In  Nuremberg,  a  retired 
employee,  after  forty  years'  service,  gets  30  per  cent 
of  his  salary  as  a  pension.  In  Lyons,  the  employee 
who  reaches  the  age  of  sixty,  after  thirty  years' 
service,  is  retired  at  two-thirds  of  his  average  salary 
during  the  last  three  years  of  service. 

Now  contrast  this  condition  with  that  in  Boston, 
for  instance,  '     '  The  total   number   of  employees 
over  sixty-live  yea:;  s  401  ,  over  seventy  v<-ars.  168. 
The  number  of  employees  pensionable  a  latter 
age  is  thus  65  per  cent  less  than  that  at  the  former. 
The  amount  of  compensation  paid  to  einployees  over 
sixty-five  is  $419,888.45;   over  seventy,  $273,000. 
The  number  over  sixty-five  reported  as  inemcient  is 
296.   The  compensation  paid   to  this  group  is 
$200,194.35.   The  percentage  of  inefficient  employees 
among  the  employees  over  sixty-five  years  is  strikingly 
large  in  many  departments.   For  example,  in  the 
cleaning  and  watering  division  of  the  street  depart- 
ment thirty-five  are  employed,  of  whom  all  are 
reported  inefficient;   in  the  cemetery  department, 
sixteen  persons  over  sixty-five  years  are  employed, 
of  whom  all  are  reported  as  inefficient ;  in  the  park 
department,  twenty-seven  are  employed,  of  whom 

«  Report  of  the  CommiistoB  on  m  Age  P«Jsloffi,  AnnuiUea  aod 
Insurance,  page  27a 


226    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

twenty-four  are  inefficient.  The  period  of  service  is 
over  thirty  years  in  the  case  of  iiq  employees  over 
sixty- five,  or  25  per  cent  of  the  total.  Only  5  per 
cent,  or  forty-two  persons,  have  been  in  the  employ  of 
the  city  It-ss  than  five  years." 

The  report  goes  on  to  show  that  employees  over 
sixty-five  years  of  age  in  other  departments  of  the 
city's  work  are  as  follows :  paving  division  of  street 
department,  109;  water  department,  65;  sanitary 
division,  street  department,  58 ;  sewer  division,  street 
department,  47 ;  cleaning  and  watering  division,  street 
department,  35;  park  division,  27;  ferry  division, 
street  department,  26;  cemetery  department,  16. 

Now  it  must  be  borne  in  mind  that  60  per  cent  of 
all  municipal  employees  over  sixty-five  years  of  age, 
in  the  city  of  Boston,  are  reported  as  inefficient.  No 
individual  employer  of  labor  would  retain  60  per  cent 
of  his  employees  above  the  age  of  sixty-five  years, 
with  the  full  knowledge  that  they  were  inefficient. 
He  would  act  on  the  •vcll-known  principle  of  economy 
in  filling  their  places  with  efficient  men.  The  city 
would  be  chargeable  with  inhumanity  if  it  cut  ofT  these 
old  employees  from  the  pay  roll  without  making 
provision  for  their  necessities.  It  would  also  be 
regarded  as  bordering  on  the  disgraceful  for  the  dty 
to  cart  its  old  employees  oflf  to  the  almshouse  or  to  the 
poor  farm.  How  much  more  humane  and  economic 


MUNICIPAL  PROVISIONS 


327 


is  the  well-established  method  in  European  cities,  of 
providing  for  all  such  ineffidents  by  systems  of  old 
age  pensions,  is  apparent  to  every  student  of  eco- 
nomics who  has  given  attention  to  the  contrast  along 
this  line  between  American  and  European  cities. 

It  is  conceded  that  some  effort  is  now  being  made 
for  municipal  pensions,  as  the  following  excerpt  from 
the  Survey,  on  Pension  Proposal  for  New  York  City,i 
shows :  — 

Following  directly  on  a  report  on  the  subject  bv  the  Citi- 
zens' Union  pension  committee,  of  which  Arthur  VVilUams  was 
chairman,  Assemblyman  Cuvillier  has  introduced  a  bill  in  the 
legislature  to  amend  the  New  York  City  charter  to  provide 
a  retirement  fund  for  city  employees. 

The  biD  proposes  to  esUblish  a  board  consisting  of  the 
mayor,  the  comptroller,  and  the  city  chamberlain,  which  shall 
have  general  jurisdiction  over  a  fund  made  up  of  deductions 
from  the  salaries  of  beneficiaries  of  i  per  cent  for  five  years' 
service  and  proportional  increase  for  each  five-year  period  until 
6  per  cent  is  reached,  when  the  amount  becomes  stationary 
together  with  donations,  legacies,  and  other  forms  of  gift' 
Membership  in  the  fund  b  voluntary.    Application  must  be* 
made  within  a  year  after  entering  the  service,  and  none  is  eUgible 
for  a  pension  who  has  not  contributed  a  sum  eqtial  to  half  the 
average  salary  received  for  the  three  years  prior  to  retirement 
Fifty  years  is  the  minimum  age  of  retirement  under  ordi- 
nary arcumstances,  and  the  amount  of  payment  depends  on 
length  of  service,  and  ona-half  the  average  salary  for  three 
previous  years  after  thirty  years'  service,  and  a  proportional 
sum  after  between  twenty-one  and  thirty-nine  years.   No  age 
'  Vol.  XXV,  pages  974-07S- 


228    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

limit  is  set  for  yi^rsons  mentally  or  physically  incapacitated,  or 
those  who  1  3e  their  office  through  no  fault  of  their  own,  who 
are  eligible  after  ten  years'  service. 

The  proposed  law  is  deigned  to  a>ver  all  the  city  depart- 
ments —  of  which  there  are  sixteen  —  except  the  departments 
of  education,  fire,  and  health,  which  already  have  pension 
systems  of  their  own. 

Senator  Cavillier's  bill  departs  from  the  suggestions  of  the 
pension  committee  in  making  no  provision  for  sickness  or  acci- 
dent, in  not  providing  for  return  of  the  contributions  of  those 
leaving  the  service  before  they  are  eligible  for  the  pension,  in 
being  on  a  voluntary  and  not  an  obligatory  Lasis,  and  in  requir- 
ing no  contribution  from  the  city. 

The  report  of  the  committee  of  the  Citizens'  Union  shows 
that,  in  1910,  the  four  departmcts  now  giving  pensions  paid 
out  about  $3,000,000,  01"  which  $400,000  came  from  the  city 
budget,  the  rest  from  gifts,  from  funds  paid  to  or  licenses  given 
out  by  the  departments,  and,  in  a'l  casts  but  the  Fire  Depart- 
ment, from  deductions  from  salaries. 

It  is  as  yet  problematical  as  to  what  will  be  the 
result  of  this  movement;  or,  even  if  successful, 
whether  it  will  be  followed  in  any  large  degree  by  other 
American  dti^. 


CHAPTER  VII 


Government  Pensions 

The  system  of  pensions  established  by  the  enact- 
ment of  Congress  for  the  relief  of  disabled  and  aged 
men  retired  from  the  army  and  navy  is  familiar  to  all 
intelligent  citizens  of  the  United  States,  because  it  is 
of  such  long  standing  and  so  universal  in  its  operation. 

Few  people  realize  the  immensity  of  the  sums  i.aid 
out  by  the  United  States  government,  since  its 
foundation,  in  pensions  to  soldiers,  sailors  and  marines, 
their  widows,  minor  children  and  dependent  relatives! 
The  Annual  Report  of  the  Commissioner  of  Pendons 
for  the  fiscal  year  ended  June  30,  191 1,  contams  the 
aggregates  of  all  such  payments  by  the  United  States 
government,  as  follows : '  — 

War  of  the  Revolution  Estimate)  .    .    .    .  $70,000,000.00 

War  of  x8i.  (service  pension)   45,853.034.19 

Indian  wars  (service  pension)   1119220552 

War  ^vith  Mexico  (service  pension)   .   .   .  45.'279.'686.83 
Civil  War  .   .  .  o       «  * 

WarwJtJc    •  ■  3,985,719.836.93 

war  with  Spam  and  insurrection  in  Philip- 

.    34,142,976.37 

Regular  estabhshment   «,705.85..33 

^^'^^^'^<i   16,488.147.99 

Total  disbursements  for  pensions    .    .  $4,230,381,730.16 
'  19"  Report  of  Commissioner  of  Pensions,  page  11. 
339 


230    OLD  AGE  DEPENDENXY  IN  THE  UNITED  STATES 

It  must  be  remarked  that  the  acknowledgment  of 
the  obligation  of  the  nation  to  provide  for  its  worn- 
out,  disabled  and  aged  defenders  has  been  increas- 
ingly apparent  in  the  i)ast  few  years.  For  instance, 
the  amount  expended  for  pensions  in  1883  was 
$60,427,573.81 ;  while  in  1910  the  amount  was 
$159,974,056.08;  that  is  to  say,  that,  in  a  period  of 
twenty-seven  years,  the  annual  payment  of  the 
United  States  government  on  account  of  pensions 
was  more  than  doubled.  This  fact  is  significant  if 
there  is  borne  in  mind  this  thought:  that  the  great 
majority  of  all  the  United  States  pensioners  are  above 
sixty-five  years  of  age.  The  people  of  the  United 
States,  therefore,  in  the  administration  of  the  national 
government  pension  system,  are  perhaps  uncon- 
sciously, but  none  the  less  truly,  recognizing  the  moral 
obligations  of  the  state  to  make  provision  for  the  relief 
of  its  aged  dependent  citizens.  This  is  apparent  also 
from  a  consideration  of  the  contrast  of  numbers  on 
the  pension  roll,  —  126,722  in  1886  and  921,083  in 
1910;  that  is  to  say.  that  forty-four  years  added  to 
the  life  of  the  pensioner  at  the  close  of  the  Civil  War 
have  witnessed  an  addition  of  794,361  to  the  number 
of  pensioners,  the  majority  of  whom  are  on  the  pension 
rolls  now  because  of  ser^  ice  or  old  age ;  nearly  all  of 
the  maimed  and  invalided  on  account  of  that  war 
ha\-ing  long  since  passed  away.   These  considerations 


GOVERNMENT  PENSIONS 


231 


are  significant  of  the  trend  of  public  thought  along  the 
line  of  governmental  provision  for  old  age  dependency. 

This,  however,  does  not  show  the  magnitude  of  this 
movement  since,  so  far  as  the  Civil  War  is  concerned, 
-it  takes  into  account  only  the  soldiers  and  sailors 
who  wore  the  blue;  and  does  not  take  into  considera- 
tion the  provisions  that  the  Confederate  States  have 
made  for  those  who  wore  the  gray.   That  these  states 
have  individually  borne  a  heavy  burden  of  which  the 
Northern  states  have  been  individually  reKeved  is 
apparent  from  the  report  of  the  pension  departments 
of  many  of  the  Southern  States;  as,  for  instance, 
Florida,  —  one  of  the  smallest  and  least  populated  of 
them  all,  —  which,  for  the  year  1910,  shows  about 
fifty-five  hundred  pensioners  drawing  from  the  state 
treasury  annuaiiy  $640,000.    Contrast  this  with  the 
condition,  for  instance,  in  New  Hampshire,  whose 
Secretary  of  State  reports,  under  date  of  December  12, 
1910 :  "  New  Hampshire  has  neither  military  pensions 
nor  state  relief.   Veterans  of  the  Civil  War  and  their 
families  are  exempted  from  the  payment  of  taxes 
upon  a  certain  amount  of  property ;  and  the  former 
are  exempted  from  the  payment  of  a  poll  tax  after 
they  have  attained  the  age  of  seventy  years.  Veterans 
of  the  Civil  War  and  their  widows  are  exempted  from 
the  payment  of  the  peddler's  license  fees."  This 
contrast  is  an  eloquent  tribute  to  the  courage  and 


I  ' 


232    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

intelligence  with  which  the  states  of  the  South  have 
assumed  the  burden  which  is  national  in  the  North. 

Unfortunately  no  data  are  at  hand  to  show  the 
magnitude  of  the  combined  state  pension  systems  for 
the  relief  of  the  aged  veterans  of  the  Confederate 
Army.  Whatever  it  may  be,  the  fact  is  apparent  that 
the  sentiment  of  our  people.  North  and  South,  is 
growing  rapidly  in  favor  of  universal  provision  for 
aged  dependent  citi/ens. 

This  is  apparent  also  in  provisions  that  are  made 
in  some  states  for  city  employees  other  than  in  the 
police  and  fire  departments.  For  instance,  Illinois 
enacted  a  law  in  1905  which  establishes  pension  funds 
for  employees  of  waterworks  and  water  departments 
in  cities  of  the  state ;  whereby  any  employee  of  such 
department  who  has  reached  the  age  of  fifty  years, 
with  a  service  record  of  thirty  years,  and  who  has 
contributed  to  the  fund,  may  retire  on  half  pay.  This 
law  also  provides  that  employees  of  public  libraries 
who  have  contributed  to  the  establishment  of  the 
pension  fund  may  retire  on  reaching  the  age  of  fifty- 
five,  after  ten  years'  service,  and  receive  a  pension 
which,  however,  is  inconsiderable  in  that  it  "shall  not 
be  less  than  six  dollars  nor  more  than  forty-eight 
dollars  per  year." 

Massachusetts  also,  in  1906,  made  provision  by 
law  for  retiring  certain  judges  of  its  courts,  after  the 


GOVEKNMENT  PENSIONS  333 

age  of  sixty,  and  a  service  of  fifteen  years,  if  incapaci- 
tated ;  the  pension  to  be  one-half  of  the  salary  at  the 
time  of  retirement.  In  1908,  Massachusetts  also 
passed  a  law  providing  pensions  for  prison  officers  who 
reach  the  age  of  sixty-five  years,  with  a  service  record 
of  twenty  years,  if  then  permanently  disabled  through 
injury  in  the  service ;  such  officer,  after  thirty  years 
of  service,  may  retire  at  sixty-five  years:  in  either 
case,  the  pension  to  be  one-half  of  the  compensation 
received  at  the  time  of  retirement. 

Many  of  the  Northern  states  have  provisions  for  the 
pensioning  of  members  of  the  National  Guard  whose 
pensions  are  usually  graded  and  conditioned  as  are 
those  for  like  rank  in  the  United  States  army. 

The  State  of  Illinois  has  recently  taken  a  new 
departure  in  pension  legislation,  the  application  of 
which  will  be  watched  with  great  interest  all  over 
the  country  and  throughout  the  civilized  world  as 
well.  It  is  a  law  granting  pensions,  ranging  from 
five  dollars  to  ten  dollars  a  month  for  each  child,  in 
families  whose  support  devolves  upon  the  mother. 
The  first  checks  under  this  new  law  were  distributed 
in  Chicago,  about  the  middle  of  November,  191 1,  to 
forty  mothers,  most  of  them  widows,  and  were  for 
amounts  varying  from  eighteen  to  one  hundred  and 
twent)-  dollars.  Nearly  all  of  the  mothers  were  tear- 
fully grateful,  as  the  pension  allows  them  to  keep 


234    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

their  little  broods  of  children  togetha  under  motherly 
influence  and  care.  Before  this  law  was  enacted, 
mothers  who  found  it  impossible  to  support  their 

children  were  compelled  to  turn  them  over  to  the 
juvenile  court,  which  placed  them  in  other  homes; 
and  the  county  made  an  allowance  each  month  to  the 
home  for  the  support  of  each  child  turned  over  to  it. 
The  new  law  authorizes  the  county  to  leave  the 
children  with  the  mother  and  pay  the  allowance  to 
her  for  each  child's  support. 

Other  than  as  now  enumerated,  there  are  no  govern- 
mental pension  systems  of  any  extent  in  operation  in 
this  country.  Various  pension  schemes  for  civil  service 
employees  have  been  proposed  in  bills  introduced  in 
Congress ;  but  none  of  them  has  thus  far  become  a  law. 

From  this  summary,  it  is  apparent  that  the  gov- 
ernment efforts  at  relief  of  aged  dependents,  other 
than  those  who  have  had  military  service,  are  as  yet 
inconsiderable  in  scope  and  resulte. 

However,  on  July  31,  191 1,  Congressman  Victor 
L.  Berger  of  Wisconsin  introduced  in  the  House  of 
Representatives  at  Washington  a  bill  providing  for 
the  pensioning  of  all  citizens  of  the  United  States  who 
reach  the  a^e  of  sixty  with  an  income  of  less  than  ten 
dollars  per  week.  As  this  bill  clearly  sets  forth  the 
principle  of  Pensions  for  Service,  the  text  of  it  is 
given  in  lull  as  "Appendix  A." 


GOVEKNMENT  PENSIONS  235 

It  is  to  be  hoped  that  the  struggle  for  the  solution 
of  the  old  age  dependency  problem  in  the  United 
States  along  pension  lines,  if  such  be  the  only  recourse, 
will  not  be  as  long  drawn  out  as  was  that  in  England. 
Mr.  Wilkinson  teUs  us » that  the  first  bill  for  state  pen- 
sions in  England  was  introduced  into  Parliament  in 
1773,  and  sets  forth  briefly  the  efforts  made  from  that 
time  on  for  more  than  a  century  before  the  principle 
was  finaUy  ingrafted  upon  the  statute  book  of  the 
nation.   However,  the  problem  is  too  acute  and  its 
solution  too  imperative  in  this  country  to  permit  any 
long-continued  dalliance  with  it. 

1 "  Peasioaa  and  Pauperiam,"  page  Sdseq. 


PART  IV 

PLANS  FOR  PREVENTION 


PAKT  rv 


PLA>fS  FOR  Pre?.  I'NTl'^v 


iVOf 


If    "  V  T    >he  ni' 
•rk  ain       ■       m  »  \  nl 

dread,  shared  e-  ^illy  by  ' 


mi-  urtune  i:  tY 

taji.    'at  1 

accoi  ail, 

mean  "cessar 
holy         of  |i 
'!s  Ihc  lu    r.  It) 

I       ;r  day     n  Lt  auL 

cr  rge,     nioed  by  l 

■•  -all  .  pn 
,  iSi  !'  lives,  bi 
c'pally  because 


'rm  of  s 
icr: 
i.ing 
offlir 


margin  between 

li  s  there  can  he 
'  ...         'iislani  llnging 

rc  th.!  iirough 

to      me  in- 
"  I'v  vitabl.  vance, 

re  Will  be  latK  ig  the 
iiainii  iuncc.   This  most  mclan- 
)nscious.  poisooa  the  present  and 
'  so  .  .illoi!  ( ivilizi  (I  in(ii;>trialism 
i  lo  nil  stronger  crititism  than  the 
•rsal  experience,  that  the  men  and 
■nergy       contributed  so  much  to 
Ic'     -.1;    ii,  leading  simple,  inex- 
iiei.      lining'  years  powerless,  prin- 
[^ni  -5 


The 


idop 


In 


-  !  ■ , 


'Ui  th'"  preamble  of  a  joint 
iie  General  A^semhh'  of  the 
of      vv  iersfv.  March  23,  1910,  is  eviflonce  that 
!    blem   -f  <      age  dependency  is  likely,  in  the 
.  aturf ,  ,e  thorough  consideration  at  the 

ands  of  lav  ^  in  America.  That  the  problem 
is  present;  that  u  is  widespread ;  that  it  deeply  con- 
cerns our  national  happiness  and  prosperity ;  that  its 

339 


240    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

demands  are  insistent  and  that  the  attempt  at  its 
permanent  solution  must  be  nation-,  perhaps  world- 
wide, cannot  be  doubted  by  an  intelligent  observer 
of  economic  conditions  to-day.  That  there  have 
been  sporadic  efforts  at  relief ;  that  there  have  been 
"poor-law  commissions"  and  other  legislative  inves- 
tigations ;  that  whole  volumes  have  been  written  on 
the  subject  "How  to  Relieve  the  Poor";  that  now 
and  then  some  industrial  corporation  or  combina- 
tion has  made  an  attempt  at  the  solution  of  the  prob- 
lem, so  far  as  its  own  employe  :s  are  concerned ;  that 
cities  and  states  have  provided  pensions  for  certain 
classes  of  their  employees;  that  societies  have  been 
organized  for  the  practical  operation  of  relief  plans, 
—  all  goes  to  show  that  a  general,  all-inclusive  solu- 
tion of  this  problem  is  imperative. 

The  following  editorial  from  the  Nov  York  Evening 
Mail,  September  25,  191 1,  entitled  "A  World-Wide 
Unrest,"  is  based  upon  a  recognition,  perhaps  uncon- 
scious though  real,  that  the  great  mass  of  wage- 
earners  throughout  the  world  is  groaning  together  for 
the  ushering  in  of  a  new  era,  —  an  era  in  which  the 
toiler  may  look  forward  to  a  quiet,  restful  old-age 
evening  at  the  close  of  a  busy  working-life  day  in  the 
happy  sunshine :  — 

The  world  seems  to  be  approaching  a  time  of  crisis.  TrouUe 
iooiiia  everywhere  —  social,  econtanic,  politicaL 


MANS  FOR  PKEVENTION 


241 


In  Britain,  the  labor  unions  seem  to  have  mastered  the  art 
of  the  universal  strike  and  the  nation  trembles,  awaiting  the 
next  upheaval.  Spain  and  Austria  have  proclaimed  martial 
law  as  the  result  of  widespread  riots  —  in  Vienna  riots  over 
the  cost  of  bread,  in  Spain  riots  that  seem  to  be  the  preliminary' 
of  a  social  revolution.  France  riots  against  high  prices.  Nor- 
way's army  is  mutinous.  The  sword  and  flame  of  tenorism 
are  abroad  again  in  Russia.  In  America  business  fnTiplftinff 
that  its  wheels  are  stopped  by  hostile  legislation. 

What  does  it  all  mean?  What  is  gomg  to  happen?  Are 
wc  on  the  verge  of  some  great  step  to  progress,  or  are  we  ap- 
proaching a  time  of  anarchy  and  public  decadence  ? 

Men  will  answer  the  question  according  to  their  preposses- 
sions. But  some  thiigs  are  certain.  The  toflers  of  the  world, 
the  wage-workers,  art  daily  drawing  nearer  to  the  lever  of 
political  power,  because  they  have  n  ained  the  knowledge  which 
is  the  source  of  all  power.  But  it  is  not  they  who  have  wrought 
the  change.  The  centralization  and  consolidation  of  capital 
invested  in  the  great  industries  and  commerce  have  centralized 
labor,  instructed  it,  solidified  it,  and  socialized  it.  Public 
schools  and  libraries  have  so  taught  the  workers  that  now  it  is 
they  who  read  the  books  of  sociology  and  economics,  rather 
than  their  more  preoccupied  employers. 

As  they  have  gained  in  education,  the  workers  have  ad- 
vanced in  refinement,  and  their  needs  and  aspirations  have 
bea>me  imperative.  Along  with  the  upward  rush  of  the 
standard  of  living  there  has  gone  an  intense  devdopment  of 
class  consciousness,  and  a  tremendous  growth  of  ambition.  It 
is  capital  itself  which  has  brought  the  workers  of  the  worid  to 
the  point  where  they  .feel  themselves  ready  to  burst  the  bonds 
that  have  held  them. 

The  world's  "unrest"  is  the  malaise  of  the  snake  that  has 
grown  until  he  knows  thai  his  old  skin  must  be  sloughed  off. 
Within  the  old  integument  the  creature  feels  a  new  and  shiniiig 


242    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

skm  waiting  for  the  light.  He  is  conscious  of  the  more  splen- 
did investiture  that  is  within  his  rusty,  time-worn  exterior. 
He  will  have  no  rest  until  he  has  made  the  change  ! 

Perhaps  we  may  all  rejoice  in  the  change  when  it  is  com- 
pleted. But  how  will  its  throes  affect  the  world  ?  There  is  the 
rub.  We  do  not  welcome  the  transition.  Riots,  strikes, 
panics,  the  griping  want  of  economic  reaction,  are  not  pleasant 
to  look  forward  to.  The  imrest  is  not  immediately  reassuring. 
It  behooves  every  citizen  to  he  steady.  Let  us  keep  our  heads 
cool,  our  hearts  kindly  and  hopeful,  aiul  our  hands  busy,  and 
strive  to  save  the  state  and  society  from  the  worst  disturbances. 

There  are  those  whose  hearts  are  large  enough  and 
whose  brains  arc  calm  and  steady  enough  to  believe 
that  the  solution  is  possible.  Professor  J.  H.  Hol- 
lander is  reported  as  saying  in  an  address  before  the 
Hebrew  Benevolent  Society  in  Baltimore,  February  12, 
191 1,  that:  "In  spite  of  the  limitless  bounds  of  pre- 
ventive work,  he  was  optiimstic  enough  to  believe  that 
in  time  there  would  be  a  mastering  of  the  problem, 
and,  in  the  end,  perhaps  its  elimination  —  not  in  the 
sense  that  every  one  would  have  a  surfeit,  but  that  no 
one  would  suffer  from  lack  of  the  actual  necessities 
of  life.  In  olden  days,  slavery  was  thought  to  be  ab- 
solutely necessary  to  the  existence  of  human  society ; 
so  much  so,  that  Plato,  in  conceiving  his  ideal  com- 
munity, made  room  for  slavery.  Society  was  un- 
thinkable without  it.  It  was  considered  as  un- 
avoidable as  poverty  is  regarded  now.  Yet  slavery 
has  gone,  and  now  the  wonder  is  that  it  should  have 


PLANS  FOK  PSEVENTION  343 

ever  been  thought  inevitable.  And  so  with  poverty. 
The  time  will  come,  not  at  once,  nor  yet  in  the  indef- 
inite future,  when  the  wonder  will  be  that  we  con- 
sidered poverty  as  inseparable  from  our  social  and 
economic  life." 

Dr.  Devine  *  is  optimistic  oiough  to  share  the  hope 
expressed  by  Professor  Hollander,  and  presents  ten 
essential  conditions  of  an  ideal  or  normal  community, 
—  sound  heredity;  protected  childhood ;  a  prolonged 
working  age ;  freedom  from  preventable  disease  and 
from  professional  crime;  indemnity  against  the  eco- 
nomic losses  occasioned  by  death,  accident,  ilhiess 
and  compulsory  idleness ;  rational  education ;  charity; 
normal  standards  of  living, —  and  a  social  religion: 
and  maintains  that  the  attainment  of  such  essentials 
is  not  fantastic,  sent'mental  or  visionary,  but  that  it 
is  altogether  practicable. 

The  efforts  at  relief  recounted  in  previous  chapters 
are  commendable;  nay,  they  are,  as  society  is  now 
organized,  indispensable ;  but  they  are  like  the  pack- 
ing of  ice  around  the  head  of  the  patient  raving  with 
fever,— -they  may  relieve  the  distre^,  but  do  not 
remove  the  cause.  How  to  prevait  poverty  in  old 
age?  — a  ?  that  is  the  question,  which  he  who 
answer  v  '  be  a  benefactor  of  the  race.  The  plans 
Iffoposed  thus  far  for  the  preventimi  of  want  in  old 

*  "MiMiy  ud  la  Ckuset,"  pages  a4x-953> 


244     '-'LP  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

age  are  worthy  of  the  most  careful  considerati(»i  in 
order  that  in  one  of  them,  or  perhaps  in  a  combina- 
tion of  all  of  them,  may  be  found  ^he  solution  of  one 
of  the  world's  most  intricate  problems.  What,  then, 
are  the  plans  proposed  for  the  prevention  of  want  in 
old  age? 


CHAPTER  I 


Thrift 

Aftek  the  most  careful  investigation  of  the  old  age 
dependency  problem  ever  undertaken  in  this  country 
by  legislative  authority,  the  Massachusetts  Commis- 
sion on  Old  Age  Pensions  presents  to  the  legislature, 
as  its  first  "construcUve  recommendation,"  the 
following :  *  — 

In  order  to  promote  independent  individual  saving  and 
strengthen  voluntary  thrift  agencies,  we  recommend  that 
thnft    be  included  among  the  subjects  of  compulsory  in- 
struction in  the  public  schools  of  this  Commonwealth.  What- 
ever solution  of  the  problem  of  old  age  pensions  may  ulti- 
mately  be  settled  upon,  it  is  certainly  most  desirable  to  take 
every  practical  measure  to  encourage  habits  of  saving  through- 
out the  population.   The  teaching  of  "thrft"  .'n  the  schools 
should  deal  with  the  individual  and  socij  ethics  of  saving  in 
general,  and  should  also  illustrate  the  princiules  of  insurance 
and  mvestment  in  particular.   The  arithmetic  of  saving  could 
be  taught  effectively  by  using  mathematical  examples  in  the 
school  texts,  which  should  bring  out  clearly  the  methods  of 
saving  and  investing  money.    This  recommendation  is  not  a 
theoretical  one,  for  the  subject  of  "thrift"  has  been  taught 
effectively  in  the  public  schools  of  European  countries,  notably 
m  France  and  Germany. 

^^port^of  Comnu«to  on  OM  Age  Pearion.,  Anadtie.  and  In- 

245 


246     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

This  is  no  new  doctrine.  Societies  for  the  encour- 
agement of  thrift  among  the  poor  have  been  in  opera- 
tion in  this  country  for  many  years  ;  some  of  them 
originated  by  practical,  helpful  charity,  like  the 
Charity  Organization  Society  in  Newport,  organized 
in  1880,  and  the  Bank  Provident  Fund  in  New  York, 
in  1888;  and  some  of  them  mutually  cooperative 
organizations,  like  the  building  and  loan  societies  so 
well  known  in  all  our  cities. 

The  institution,  however,  that  is  most  widely  and 
favorably  known,  and  is  almost  universally  pointed 
out  as  the  laboring  man's  best  friend,  is  the  saving 
bank.  These  institutions  are  deservedly  well  patron- 
ized by  the  more  prosperous  among  the  working 
class  and  tradespeople.  Being  operated  vmder  strict 
government  inspection  and  superviaon,  they  afford 
an  element  of  security  for  savings;  and  being  con- 
ducted with  business  sagacity  and  prudence,  they  are 
a  potent  encouragement  of  the  habit  of  saving.  The 
results  accomplished  by  a  well-conducted  building  and 
loan  society  or  a  carefully  managed  savings  bank  are  re- 
garded oftentimes  by  working  people  as  well-nigh  mar- 
velous. How  it  is  possible  for  the  seventy-five  dollars 
which  theworkingman  invests  each  year  in  building  and 
loan  stock  to  grow  a  thousand  dollars  in  ten  years; 
or  how  it  comes  about  that  the  sum  of  two  dollars 
which  he  puts  every  month  into  the  savings  bank 


THRIFT 


amounts  to  a  thousand  dollars  in  twenty-five  years, 
seems  to  him  a  sort  of  Aladdin-and-his-Lamp  witchery.' 

K  anything  could  encourage  "thrift"  on  the  part 
of  the  workingman  who  can  lay  by  any  savings  at 
aU,  it  would  be  the  promise  of  the  savings  bank  that 
if  he  will  deposit  five  doUars  a  week,  the  bank  will 
pay  him,  in  twenty  years,  nearly  eight  thousand 
dollars,  which  sum,  at  the  end  of  that  time,  would 
afford  him,  at  4  per  cent,  an  income  of  three  hundred 
and  twenty  dollars  a  year.   The  enthusiastic  supporter 
of  the  savings  bank  principle,  as  the  means  of  remov- 
ing dependency  in  old  age,  points  to  the  fact  that  any 
young  man  who,  at  age  twenty,  deposits  in  the  bank 
one  hundred  dollars  and  a  like  sum  at  the  beginning 
of  each  year  thereafter  for  forty  years,  will  have  to 
his  credit,  at  the  age  of  sixty,  on  a  4  per  cent  compound 
interest  basis,  the  sun  <.f  about  ten  thousand  dollars 
as  a  provision  for  old  a^'e  which  would  afford  him  an 
income  of  nearly  seven  hundred  dollars  per  year  for 
the  balance  of  his  life,  as  computed  by  the  expectancy 
taWes.   As  a  matter  of  fact,  many  of  our  well-to-do 
wage-earners  are  taking  advantage  of  the  oppor- 
tunities offered  by  these  institutions  operatmg  on  the 
principle  of  compounding  interest.   The  success  of 
the  postal  savings  banks,  which  have  been  estab- 
lished under  the  authority  of  Congress,  for  attracting 
savings  of  exceedingly  cautious  smaU  investors,  is  an 


248    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

indication  that  there  are  very  many  wage-earners 
who  do  not  need  to  be  taught  in  school  the  value  of 
"thrift."  Such,  however,  in  comparison  with  the 
great  body  of  wage-earners,  are  inconsiderable  in 
number.  However  much  the  average  worker  may 
appreciate  and  desire  to  practice  the  hahit  of  thrift, 
his  living  conditions  are  an  insuperable  ol)stack'. 

One  of  the  members  of  the  Massachusetts  Com- 
mission before  referred  to  dissents  from  the  "construc- 
tive recommendation"  of  "thrift"  in  presenting  to  the 
Massachusetts  legislature  a  minority  report,  in  which 
he  says,'  "The  thrift  habit  is  hard  to  build  up  among 
the  poorer  class  of  people,  because  they  do  not  earn 
money  enough  to  make  even  a  beginning."  He 
quotes  from  the  Twenty-Second  Annual  Report  of 
Statistics  of  Manufacturers,  1907,  page  19,  to  the 
effect  that  the  average  wage  paid  380,573  workmen  in 
41 2 1  establishments,  in  thirty-three  cities  in  Massa- 
chusetts, was  $520.22 ;  and  states: "  There  is  no  doubt 
in  my  mind  that  an  average  of  ten  dollars  per  week  is 
not  a  living  wage  in  this  state,  an  J  there  is  no  oppor- 
tunity for  the  average  man  to  provide  for  old  age  on 
a  wage  as  above."  He  also  calls  attention  to  the  large 
increase  in  the  cost  of  living,  evident  to  every  house- 
hold, with  practically  no  increase  in  wages. 

» Report  of  Commission  on  CAd  Age  Pensions,  Annuities  and  In- 
surance, pages  334  et  seq. 


THRIFT 


249 


This  opinion  that  "thrift,"  either  compulsory  or 
voluntary,  is  impossible  on  the  low  wages  received  by 
the  average  workman  to-day  is  further  substantiated 
by  the  investigations  made  under  the  auspices  of  the 
Russell  Sage  Foundation,  by  Professor  R.  C.  Chapin, 
into  the  standard  of  living  in  Xevv  York  City,  in  which 
the  conclusion  is  expressed  that : '  "  While  some  sav- 
ing in  families  with  incomes  of  six  hundred  and  seven 
hundred  dollars  takes  place,  it  is  relatively  infrequent 
till  the  eight-hundred-dollar  line  is  reached."  Pro- 
fessor Chapin's  report  shows  that  an  income  of  be- 
tween seven  hundred  and  eight  hundred  dollars  will 
barely  support  a  family  of  five  persons  in  the  city  of 
New  York,  including  no  provisions  whatever  for 
possible  emergencies. 

It  has  already  been  shown,  however,  that  ten 
million  wage-earners  in  this  country,  or  60  per  cent  of 
all,  receive  less  than  six  hundred  dollars  per  year.' 
How  is  any  saving  for  old  age  possible  on  such  a  low 
wage  ?  It  is  reported  that  one  of  the  speakers  in  the 
debate  on  the  Old  Age  Pension  Act  in  New  Zealand 
gave  expression  to  the  following  burst  of  indignation : ' — 

>  R.  C.  Chapin,  "The  Standard  of  Living  in  New  York  City," 

page  2^6. 

=  Professor  Scott  Nearing  in  his  book, "  Wages  in  the  United  States," 
published  September,  191 1,  finds  as  a  result  of  many  months'  inves- 
tigation that  three-fourths  of  the  men  wagivcaraers  in  this  country 

receive  hi.-.  hun:lr;  d  dollars  a  year. 

•  H.  D.  Lloyd,  "Newest  England,"  page  343. 


250    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


"Thnft  oi't  of  four  shillings  a  day!  With  perhaps 
eight  or  nine  mouths  to  feed,  clothes  to  find,  boots  for 
thdr  feet,  and  books  for  their  school !" 

In  far  too  many  instances,  the  results  of  such  thrift 
as  the  toiler  may  exercise  are  swept  away  overnight 
by  foolish  investment.  As  a  laboring  man  is  quoted 
as  sa>'ing  not  long  since:  "If  is  mighty  hard  to  save 
up  a  thousand  dollars  by  laying  aside  a  dollar  or  two 
a  week  and  then  to  take  it  out  of  the  savings  bank 
and  lose  it  to  a  get-rich-quick  swindler,  as  I  have  just 
done."  Such  a  man  by  heroic  economy  may  be  able 
to  save,  and  the  very  desire  to  accumulate  against 
old  age  often  leads  him  mto  ventures  exploited  in 
advertisements  cleverly  worded  and  long  on  promises, 
which  the  careful,  experienced  business  man  knows 
can  never  be  fulfilled.  If  "thrift"  is  to  be  placed  in 
the  curriculum  of  the  public  schools,  then  its  kindred 
subject,  "finance, "  should  not  be  omitted. 

The  treatment  wUch  wage-earners  receive  in  count- 
less individual  cases  at  the  hands  of  unscrupulous  or 
heartless  overseers  or  employers  adds  inhumanity  as 
an  insult  to  the  low-wages  injury.  For  example,  in 
one  of  the  largest  city  department  stores,  whose  ideals 
are  advertised  as  high  in  the  making  of  efficiency  and 
comfort  among  employees,  a  young  woman  employed 
at  four  dollars  per  week  was  fifteen  minutes  late  in 
returning  from  her  noon  lunch,  for  which  a  fine  of  one 


THRIFT  251 

dollar  was  imposed  upon  her.  Her  written  exp(»tula- 
tions,  based  upon  the  excuse  that  she  was  late  because 

of  the  necessity  of  consulting  a  physician  concerning 
her  health,  resulted  in  her  discharge  on  the  next  regu- 
lar pay  day.  Volumes  could  be  written  upon  this 
phase  of  the  barbarity  with  which  multitudes  of 

employees  are  treated. 

It  must  not.  h()wp\er.  be  concluded  that  the 
employer  is  altogether  responsible  lor  the  low  wages 
and  the  system  of  fmes  and  forfeitures  still  reducing 
those  wages  and  making  thrift  hopel'.>s.  The  con- 
sumer is  largely  responsible  for  the  exactions  placed 
upon  labor.  Professor  Ryan '  quotes  a  pen  picture 
drawn  by  Mr.  W.  S.  Lilly  on  the  cause  of  cheapness 
as  follows :  — 

One  afternoon  I  chanced  to  meet  in  Regent  Mrect  three 
lady  friends  who  had  come  up  to  tuwn  for  shopping,  and  I 
remember  their  surprise  and  delight  at  finding  in  one  of  the 
esMblishments  which  they  visited  shirt  hi.  ,t,s,  of  a  dainty 
kind,  on  sale  at  half  a  crown  cac  h.  ^hey  purchased  a  dozen 
and  evidenUy  regarded  this  cheapn  s  as  simply  miraculous. 
They  were  so  good  as  to  invite  me  to  dine  with  them  that 
evening  at  a  restaurant  of  which  I  will  not  mention  the  name, 
for  I  have  no  desire  of  advertising  it.  Nor  indeed  is  that 
necessary.  The  perfection  of  its  cuisine  and  the  excellence  of 
its  wines  have  deservedly  won  for  it  a  world-wide  reputation. 
It  is  as  deservedly  celebrated  for  its  high  charges.  I  could  not 
help  noticing  that  on  the  occasion  of  which  I  speak  my  kind 

*  "A  Living  Wage,"  pages  264-266. 


3S2     <  LD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

hostt^s  rfft'ivt'd  n  cry  little  change  from  the  five-pound  note 
vvhii  h  i'  tindin  l  in  payment  for  our  dinner.  The  evening 
was  fine:  and  after  taking  leave  of  my  friend-;,  I  set  out  to 
walk  to  South  Kensington.  When  I  reiched  Hyde  Park 
Corner  ,i  carriage  dashed  rapidly  out  of  the  Park,  and  a  young 
girl,  who  was  walking  just  in  front  nf  me,  w.is  almost  run 
over.  Apparently  she  had  not  nolicevl  it:  fortunately  i  iiad 
seized  her  by  the  arm  and  pulled  her  back  In  time.  She  seemed 
a  good  deal  frightened  and  inclined  to  be  hysterical.  A  con- 
stable came  up,  ;  nd  1  looked  at  him  interrogatively,  wonder- 
ing whether  she  was  quite  sober.  He  caught  my  meaning 
and  after  a  swift  glance  at  her,  said :  "  No,  sir,  it's  not  drink : 
it's  hunger  If  slic  sits  down  for  a  bit,  she  will  pull  herself 
together,"  He  he!i)ed  her  io  a  seat  just  inside  the  Park  and 
left  her  there,  after  a  minute,  murmuring  something  which  I 
did  not  quite  catch  about  sending  some  one  to  her.  The  giri 
said  to  me :  "  Thank  >  for  saving  me ;  I  was  nearly  killed,  I 
think  "  ;  and  she  shu'!  kre*!  She  was  a  slicrht,  delicate-looking 
creature,  of  plaintively  pre{)os.sessing  appearance,  neatly 
dressed,  and  quiet  in  manner.  I  replied :  "  Yes,  you  had  a 
narrow  esca{)c;  now  that  you  have  recovered  from  your 
friglit,  shall  I  put  you  into  a  hansom  and  send  you  liome?" 
"Thank  you,"  she  answered,  "  but  I  mustn't  go  back  yet:  I 
have  come  out  to  try  to  earn  a  little  money ;  I  spent  my  last 
shillings  in  buying  those  shoes  to  come  out  in,  and  I  owe  my 
landlady  a  fortnight's  rent;  I  haven't  been  able  to  get  any 
work  lately."  I  inquired  what  she  worked  at.  She  told  me 
she  made  ladies'  shirt  blouses,  but  could  not  live  on  what  she 
earned  in  that  way ;  she  was  paid  four  shillings  for  making  a 

dozen:  it  was  the  usual  rate;  she  worked  for  Mes^-rs.   , 

mentioning  the  tradesmen  whose  shop  my  fair  friends  had 
visited  that  aftemo(Hi.  It  is  a  dictum  of  Renan  that  the 
miraculous  is  the  unexplained;  and  this  was  the  explanation 
of  those  miracles  of  cheapness  at  which  my  friends  had  marveled. 


THXHT  353 

Professor  Ryan  need  not  ha\c  gone  to  En|^d  for 
so  pertinent  an  illustration  of  the  point  he  makes. 
Such  cases  are  myriad  in  this  country.  Can  thrift 
be  possible  when  labor  is  so  driven  by  employer  and 
consumer?  It  has  been  said  by  the  observers  of 
economic  conditions  of  two  generations  that  the 
colored  slave  in  the  South,  before  the  War,  received 
from  the  <^nscientious  master  more  considerate  treat- 
ment "'Mn  is  accorded  many  a  poor,  driven  human 
"  beast  of  tou  '  in  our  large  cities  to-day.  The  master 
on  the  plantation  guarded  the  health  and  life  of  the 
slave,  with  a  view  to  conserving  the  sla\  e's  etTiciency 
as  a  workman.  Too  often  now,  however,  society,  in 
its  co'"  ctive  capacity  of  emp!"  -"r  and  con.-,umer, 
neglects  ts  workers,  and  this  in .  .  "  suits  in  an 
economic  waste,  which,  added  to    •  ■,  cHscour- 

agement  and  hopelessness  of  tht  „c  worker, 

m.ikes  a  sum  of  social  condition  in  which  thrift  is 
not  only  impossible,  but  almost  unthinkable. 

The  possibility,  then,  of  "thrift"  becoming  a  factor 
in  the  solution  of  our  problem  is  depen  Jctit  upon  a 
readjustment  of  the  wage-earner  in  his  reiaiion  to  the 
body  politic.  In  fact  this  is  the  next  step  in  human 
progress.  The  emancipation  of  the  serfs  throi^h 
the  passing  of  the  feudal  system  in  Europe ;  the  gi  ;int 
ing  of  human  right.-  to  the  common  people  through 
the  Magna  Charta ;  the  abolition  of  slavery  in  America 


254    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

and  professedly  throughout  the  world,  —  these  were 
each  a  step  in  the  uplift  of  common  humanity;  and 
each  brought  a  new  era  into  the  world's  history.  The 
next  step  is  the  abolition  of  industrial  bondage  which 
will  usher  into  the  world  an  era  comparable  with  which 
all  others  are  well-nigh  insignificant,  though  necessjiry, 
preliminaries,  —  the  universal  brotherhood  of  man. 

The  signs  of  the  times  indicate  that  this  revolution 
is  at  hand.  Not  much  longer  will  the  wage-earner  — 
the  chief  producer  of  wealth  —  endure  the  present  con- 
ditions. Mr.  Spahr'  statts  that  one-fourth  of  the 
people  consume  two-thirds  of  '  a-  products  of  industry 
and  that  the  other  thrce-fourlhs  must  content  them- 
selves wiih  one-third  ;  inotluT  words,  th<.  great  major- 
ity of  the  working  class  in  ihi^  country  consume  per 
capita  not  more  than  one-eighth,  or  one-tenth  as  much 
as  do  one-fourth  of  the  entire  i)oi  . lation.  Deep  down 
in  the  breast  of  the  wage-earning  class  this  convic- 
tion rankles,  and  produces  a  sullen  mood  that  prompts 
individual  and  sometimes  collective  expressions  of  im- 
patience and  hostility  towards  the  representative  of  the 
more  prosperous  class,  as  he  rolls  through  the  streets 
in  his  automobile,  clad  in  rich  garments,  on  his  way 
from  his  luxurious  home  to  the  club,  theater,  social 
function  or  on  his  tours  of  recreation  and  amuse- 
ment. 

>  C.  B.  Spahr,  "Distribution  of  Wi»IUi,"  pages  1 38-129. 


THRIFT  255 

"If  dependence,  in  cases  of  industrial  misfortunes, 
were  the  result  of  intemperance  or  improvidence; 

if  it  indicated  that  wages,  ample  or  excessive,  had  been 
ruthlessly  squandered;  if  this  dependency  could  be 
attributed  justly  to  the  fault  or  even  the  folly  of  the 
victim;  if  society  in  its  industrial  adjustments  had 
done  its  full  duty  by  him,  —  possibly  there  might 
be  righteous  and  wholesome  discij)line  and  warning 
in  visiting  upon  him  the  contempt  and  od.'um  which 
the  public  dependent  is  made  to  feel.  But  we  do 
not  believe  this  to  be  the  case  even  in  the  majority 
of  instances."  •  The  truth  is  that  the  great  majority 
of  workingmen  in  this  country  are,  as  Dr.  Devine 
says,  victims  of  maladjustment.  They  do  not  re- 
ceive a  living  wage.  It  would  require  an  actuarial 
calculation,  perhaps,  to  determine  what  the  living 
wage  should  be;  but  before  "thrift*'  can  become  to 
the  working  class  any  more  than  a  chimera,  that 
class  must  receive  its  share  of  the  production  of 
wealth. 

It  was  this  phase  of  the  question  that  influenced 

the  vote  of  the  postal  ser\ice  employees  in  Washing- 
ton, as  expresse(i  by  the  poll  conducted  by  a  newspaper 
of  that  city,  on  the  bill  })endini;  in  Con.i^ress  to  estab- 
lish a  Postal  Ser\i((>  Retirement  Tund.  The  {)rin- 
cipal  features  of  the  bill  were  tli.it,  after  thirty  years 

'  Frank  \V.  Lewis,  •.Sutc  Insurantc,"  pages  144-145. 


256    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


of  service,  clerks  may  retire  at  the  age  of  sixty,  with 
50  per  cent  of  their  average  annual  pay  for  the  live 
preceding  years;  after  twenty-live  to  thirty  years 
of  service,  retirement  at  age  sixty- two,  with  45  per 
cent  of  the  average  pay ;  after  twenty  to  twenty  live 
years  of  service,  retirement  at  age  sixt\- live,  with 
40  per  cent  of  annual  pay.  Provision  was  also  con- 
templated for  disability  retirement;  after  five  years 
at  a  pension  of  30  per  cent  of  the  annual  pay ;  after 
a  service  of  from  five  to  ten  years,  at  40  per  cent  of 
the  annual  pay,  and  after  from  ten  to  twenty  years, 
at  50  per  cent  of  the  annual  pay.  Messengers  dis- 
tributed the  newspaper  ballots  in  the  State,  War, 
Navy,  and  Treasur>'  Departments;  and  the  clerks 
had  ample  time  to  prepare  the  ballots  at  their  desks. 
The  poll  resulted  as  follows :  — 

For  immediate  increase  in  salaries  independent  of  any 

retircmoit  or  pension  legidation  7*459 

For  immrdiate  provision  for  retirement  on  straight 

pension  provided  wholly  by  the  department  .    ■  317 

For  immediate  provision  for  retirement  on  annuities 

provided  by  compulsory  savings  by  employees   .  186 

For  immediate  provision  for  increase  in  salaries  accom- 
panied by  retirement  on  annuities  provided  by 
compulsory  savings  by  employees  1,067 

For  immediate  provision  for  increase  in  salaries  accom- 
panied by  straight  pen^ms  provided  whdly  by  the 

government  1,465 

Total  10,494 


THRIFT  257 

Thus  71  per  cent  of  over  10,000  dvil  service  employees 
proclaimed  that  they  regarded  their  present  compen- 
sation a>  inadecjuate  to  the  necessities  of  life ;  prob- 
ably in  view  of  ihe  fact  that  the  cost  of  living  has 
increased  so  materially  that,  with  no  corresponding 
increase  in  their  remuneration,  they  find  it  difficult 
to  maintain  the  standard  of  living  to  which  they  have 
been  accustomed.  To  oflfer  them,  in  lieu  of  a  living 
wage,  the  promise  of  a  retirement  on  pension  or  to 
enforce  up<Mi  them  compulsory  thrift,  by  deductions 
from  present  remuneration,  which  they  regard  as 
inadequate,  presented  a  dilemma,  either  horn  of 
which  they  refused  to  accept. 

Mr.  J.  A.  Hobson,  in  an  article  on  "Old  Age  Pen- 
sions," says: ' — 

To  other  critics  who  insist  that  provision  for  old  age  could 

be  made  by  all,  or  neariy  ail  of  the  wage-earners,  if  they  would 
spend  less  on  drink  or  on  other  useless  or  injurious  objects, 
there  are  two  replies:  first,  that,  if  such  improvements  in 
expenditure  were  made,  other  elements  in  a  progressive  stand- 
ard of  comfort  have  a  prior  claim  which  would  easily  absorb 
the  savings;  secondly,  that  iho  state  in  its  prjlicy  is  bound  to 
consider,  not  some  theoretically  wise  economy  of  resources,  but 
such  economy  as  is  actual  or  probable. 

The  economy  and  moral  environment  of  most  of  our  workers 
IS  such  as  practically  to  preclude  calculations  for  a  comforUble 
old  age  or  wisely  discriminative  expenditure  in  the  present. 

On  all  these  points  the  case  <rf  women  workers  is  even  more 

'  The  Sociological  Revitvi,  Vol.  1,  1908,  page  296. 


358    OLD  AGE  DEPENDENCY  IN  THE  UNITKD  STATES 


conclusive  than  that  of  men ;  for  the  normal  wage  of  women 
workers,  even  in  tolerably  skilled  town  industriab,  is  a  "sweat- 
ing" wage,  insuf5cient  to  maintain  them  in  full  efficiency, 
mi.n  h  less  to  affiinl  provision  for  old  age.  The  only  consider- 
able class  of  women  workers,  ouisiue  of  Lancashire,  who  are 
economicaUy  competent  to  make  any  sacb  provision,  is  the 
better  paid  grade  of  domestic  service ;  many  of  these  workers 
do  attempt  some  saving  for  this  and  other  purposes,  but  much 
of  it  is  sucked  up  to  assist  in  family  emergencies,  often  going 
to  support  the  <Ad  age  of  their  parents. 

The  above  answer  to  the  proponents  of  the  thrift 
doctrine  in  England  is  equally  applicable  to  the  same 
class  in  America. 

Professor  Ryan,  in  showing  that  the  habit  of  thrift 
must  be  cultivated  in  self-denial  and  the  cutting  out 
of  indulgences  that  are  not  absolutely  essential  to 
existence,  calls  attention  to  the  oft-repeated  advice 
from  pulfHt  and  platform  that  labor  should  boycott 
the  dramshop  and  saloon  and  put  beer  and  other 
liquors  on  the  black  list,  etc.,  by  showing  that  the 
expenditure  for  intoxicating  drink  is  already  lowest 
amongst  the  lamilics  earning  the  lowest  wage.* 
Families,  for  instance,  whose  annual  income  averages 
$401.65  report  an  average  expenditure  of  $8.58  per 
annum  for  drink.  Those  whose  average  annual 
income  is  $550.  ^0  report  an  average  expenditure  of 
SiS.oi)  for  liquor.  It  is  only  when  one  gets  to  the 
families  whose  average  annual  income  is  $859.64 
'  "A  Living  Wage,"  page  igo. 


THRIFT 


259 


that  he  finds  an  annual  expenditure  for  drink  which 
is  certainly  disproporUonate,  namely  $54.84.  The 
average  of  all  families  considered  is  about  I16.13 
for  drink;   and  the  conclusion  is  inevitable,  that 
"an  addition  of  $16.13  to  the  annual  income  of  the 
famih'es  of  all  the  underpaid  would  stiU  leave  thou- 
sands of  them  below  the  level  of  reasonable  living." 
As  dnnk  is  about  the  only  -  luxury"  of  the  ver>'  poor, 
it  is  apparent  that  cultivation  of  "thrift"  by  the  elim- 
ination of  this  luxury  would  not  go  far  towards  the  solu- 
tion of  the  problem ;  cspeciall>-,  since  it  is  assorted  on  re- 
liable authority  that  drink  is  responsible  for  only  about 
one-seventh  of  the  pauperism  of  the  entire  country. 

As  a  matter  of  fact,  the  doctrine  of  "thrift"  as  a 
panacea  for  the  ills  of  poverty  and  old  age  pauperism 
is  usuaUy  received  by  the  workingman  with  scant 
courtesy.   He  admits  its  desirabiUty  and  longs  for 
the  opportunity  to  accept  it;  but,  in  his  present 
condition,  it  is  beyond  him.   To  practice  it  with 
al!  of  his  income  now  going  for  very  poor  shelter  for 
his  family,  rough  clothing  and  insufficient  food,  he 
would  be  required  to  take  poorer  shelter  and  yet 
poorer  clothing  and  less  nutritious  fooa.    ZZz  „:2ets 
the  proposition  with  an  argument  like  this:  "I  have 
a  right  to  enough  of  earth's  products  to  afford  me  and 
"lino  a  decent  living.    If  I  expend  all  of  my  working 
tmie  and  the  energies  of  my  mind  and  body  in  the 


260    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

perfonnance  of  useful  tasks,  I  have  fulfilled  the  condi- 
tion that  is  a  reasonable  prerequisite  to  my  right  of 
a  fair  share  of  the  world's  goods.  I  am  not  getting 
that  share  now.  It  is  not  my  fault.  With  wages 
only  sufficient  to  keep  soul  and  body  together,  to 
practice  'thrift'  and  'economy'  beyond  what  is  now 
my  habit  is  an  utter  impossibility."  Out  of  this 
ultimatum  has  grown  the  unrest  which  the  Bishop 
of  Birmingham,  Dr.  Gore,  in  a  pastoral  letter  issued 
about  the  time  of  his  transfer  to  Oxford,  is  reported 
as  having  referred  to  in  the  following  terms :  — 

There  has  been  a  profound  sense  of  unrest  and  dissatis- 
faction among  the  workers  recently.   I  cannot  but  believe 

that  this  profound  (liscontcnt  is  justified,  although  some  par- 
ticular exhibitions  of  it  are  not.  As  Christians  we  are  not 
justified  in  tolerating  the  conditions  of  life  and  labor  under 
which  the  vast  mass  of  our  population  are  living. 

We  have  no  right  to  say  that  these  conditions  arc  not  remedi- 
able and  preventable.  The  lack  of  equipment  for  life  among 
the  young,  and  later  the  insecurity  of  employment  and  in- 
adequacy of  remuneration  and  the  consequent  destitution  and 
semi-destitution  among  so  many  people,  ought  to  inspire  in  all 
Christians  a  determination  to  reform  our  system. 

One  of  the  conclusions  which  Professor  Ryan  draws 

from  the  rosea rchi  s  and  argtunents  he  presents  on  the 

wage  question  is '  -  - 

That  the  universal  application  of  the  Living  Wage  prin- 
ciple would  cause  an  immense  improvement  m  our  industrial 

» "A  Living  Wage,"  page  338. 


THRIFT 


26z 


and  social  conditions.   It  would  mean  an  increase,  in  various 

<!egrces,  in  the  remuneration  of  more  than  60  per  cent  of  the 
male  adults  employed  in  urban  occupations.  It  would  go 
very  far  toward  removing  those  plague  spots  of  our  cities  in 
which  thousands  upon  thousands  of  human  beings  are  able  to 
oljtain  only  a  fraction  of  the  requisites  of  ph}rsical  health  and 
comfort,  and  are  foredoomed  from  infancy  to  mental  and 
moral  degeneracy.  Of  the  millions  who  are  now  above  these 
lowest  economic  depths  and  yet  below  the  plane  of  a  decent 
livelihood,  thou^ninds  would  be  freed  from  the  necessity  of 
working  at  an  age  at  which  they  ought  to  be  in  school ;  thou- 
sands who  at  present  can  command  only  the  bare  necessities 
of  living  would  realize  for  the  first  time  the  meaning  and  the 
blessing  of  moderate  comfort ;  thousands  of  men  who  are  able 
to  provide  for  the  present  wants  of  themselves  and  families, 
but  can  lay  by  nothing  for  the  contingencies  of  the  future, 
would  be  lifted  out  of  this  depressing  condition;  and  thou- 
sands of  young  men  who  cannot  now  contemplate  marriage 
would  be  able  to  become  heads  of  families  ^nd  live  as  normal 
human  beings.  For  a  large  proportion  of  those  who  are  at 
present  underpaid,  a  Living  Wage  would  prove  a  stepping 
stone  to  a  still  hii,'her  condition.  .  Finally,  the  nation's 
gain  in  physical,  mental,  and  moral  i:.  lith.  and  in  the  increase 
of  contentment  and  good  feeling  amtmg  its  citizens,  would 
insure  its  continued  preeminence  among  the  world's  happiest, 
most  vigorous,  and  most  progressive  peoples. 

As  a  "constructive  recommendation"  for  the  pre- 
vention of  old  age  destitution,  "thrift"  will  receive 
due  consideration  by  working  people  of  the  land  when- 
ever it  becomes  possible  to  earn  even  a  modiciun  above 
a  living  wage. 


CHAPTER  II 


Pensions  by  Purchase 

The  principle  of  pensions  by  purchase  is  advocated 
by  various  classes  of  economists;  and  many  excel- 
lent arguments  are  advanced  on  its  behalf,  all  of  which 
in  the  final  analysis  grow  out  of  the  fimdamental 
proposition  that  this  is  the  only  method  of  providing 
against  the  helplessness  and  necessities  of  old  age 
without  violating  well-recognized,  basic  social  and 
economic  rules.  It  is  urged  that,  in  this  country 
especially,  every  man  is  the  "architect  of  his  own 
fortune";  that  the  provision  against  want  at  any 
period  in  life  is  an  individual  obligation ;  that  it  is 
an  evidence  v(  shiftlessness  and  carelessness,  —  a  pure 
lack  of  llirift  if  any  man  or  woman  comes  down  to 
old  age  unprovided  tor;  that  in  view  of  the  various 
opportunities  now  onered  through  many  channels 
for  securing  indemnity  against  want  in  old  age,  there 
is  no  excuse  for  becoming  an  old  age  public  charge, 
except  in  occasional  instances  of  unpreventable  mis- 
fortune; that  any  hope  of  old  age  relief  from  want 
which  is  not  based  upon  individual  thrift,  economy 

363 


PENSIONS  BY  PUXCHASE  36$ 

and  foresight  decreases  eflSdency,  independence  and 
manliness ;  that  it  is  an  imposition  on  the  general  body 
of  our  industrial,  thrifty  population  and  an  unneces- 
sary and  unwarranted  addition  to  the  already  heavy 
burdens  of  the  taxpayers  to  permit  the  shiftless,  lazy 
and  improvident  to  expect  and  rely  on  protection 
against  want  which  they  themselves  have  not  secured 
by  their  own  prescience  and  determination. 

It  must  be  granted  that  these  arguments,  although 
largely  negative,  are  weighty;  and  their  proponents 
ill  the  insurance,  industrial  and  legislative  world  are 
numerous,  enthusiastic  and  aggressive. 

There  are  already  established  certain  well-defined 
and  safe  avenues  of  purchasing  i)ensions;  and,  in 
\iew  of  the  importance  of  the  princi])lc  which  has 
received  a  widespread  recognition  in  theory  and  some- 
what extended  application  in  pracUce,  a  review  of 
the  various  schemes  proposed  under  the  purchase 
plan  may  be  of  interest. 

A.  Insurance  Companies'  Annuities 

For  many  years  in  this  country,  life  insurance 
companies  have  been  offering  the  public  life  annuities 
in  every  conceivable  form  devised  by  actuarial  science, 
llie  flirecting  heads  and  agency  force  of  such  com- 
panies steadfastly  maintain  that  there  is  no  other 
scientific,  economic  means  at  h-*iid  consistent  with 


264     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

American  ideals  for  protection  against  want  in  old 
age.  As  the  late  John  F.  Dryden  expressed  it : » — 

The  Anirriran  aim  and  iMca!  is  for  the  hi^^iest  possible 
dcgriT  111  iTononiic  inilcpcmloncc ;  and  such  independence 
throughout  life,  particularly  in  old  age,  <  au  only  be  gained  by 
rational  education  in  family  ezpoiditures,  savings  and  insur- 
ance and  by  a  decidcfily  hight  r  di-grcc  <<<  nniustrial  cfrKictuy 
of  the  workers  of  the  nation.  Tlic  only  permanent  solution 
of  the  problem  of  poverty  is  through  the  development  of  the 
virtues  of  self-reliance,  f(»etbought  and  thrift ;  and  no  social 
institution  afifords  more  substantial  aid  in  this  effort  than  life 
insurance  in  any  one  of  its  many  and  varied  forms  successfully 
and  practically  adapted  to  the  needs  of  the  people.  Notwith- 
standing the  progress  which  life  instirance  has  made,  there 
remain  vast,  unrealized  possibilities  for  effecting  through  the 
life  insurance  principle  a  permanent  and  general  solution  of 
the  problem  of  dependent  old  age;  and  the  most  important 
step  in  this  direction  is  the  development  ot  the  monthly  in- 
come policy,  to  which  I  wish  to  draw  attention  in  some  detail, 
to  emphasize  a  most  desirable  solution  of  the  problem  of  need- 
less poverty. 

Senator  Dr\den  then  elaborated  his  monthly 
income  policy  and  described  its  results  in  the  follow- 
ing forceful  way:'  "To  the  poor,  the  prosperous 
and  the  well-to-do  alike,  the  monthly  income  policy 
furnishes  an  ideal  form  of  family  protection  or  self- 
support  in  old  age,  superior  to  any  other  present 
method  of  savings  investment  or  insurance." 

Not  only  the  Prudential  Life  Insurance  Company, 

' '  l  ife  Insurance  and  Other  Subjects,"  pages  122,  i.-j. 
-  Ibid.,  page  i24.< 


PENSIONS  BY  PURCHASE 


a6s 


whose  numthly  income  policy  Senator  Dryden  de- 
scribed, but  also  other  insurance  companies,  doing 

what  is  known  as  an  industrial  insurance  business, 
offer  monthly  income  poh'cics  and  endowment  policies 
with  the  endowrncnt  payabK  in  instalments,  and 
various  other  schemes,  for  the  benelit  of  members 
of  the  working  classes,  covering  the  joint  contingency 
of  death  or  old  age.  These  polirios  are  usually  offered 
on  weekly  premium  rates  and  amounts  ol  indemnity 
payable  at  de  th,  or  at  the  end  of  the  endowment 
period,  as  set  forth  in  the  following  table :  — 


TABLE  Vra 
TwENTY-yzAX  Endowment  Table 


Aoi  NiXT 
BanoAY 


Amovnt  or  Emmwunt  ImoANOc  im  Wsmv  Futimni  or— 


Cestt 


s 

10 

IS 

10 

J5 

30 

35 

40 

JO 

$ 

$ 

1 

s 

$ 

$ 

« 

s 

« 

t 

30 

43 

86 

129 

172 

2IS 

258 

301 

344 

387 

430 

JS 

42 

84 

126 

168 

210 

252 

294 

336 

378 

120 

30 

4' 

S-> 

r-M 

1(14 

20s 

:46 

287 

328 

4 

35 

40 

80 

120 

160 

200 

240 

280 

320 

360 

40c 

40 

38 

76 

114 

«S2 

IQO 

21H 

266 

304 

342 

380 

45 

36 

72 

108 

144 

180 

216 

232 

r 

i-4 

360 

50 

32 

64 

96 

128 

160 

192 

224 

25(1 

288 

300 

The  Metropolitan  T.ife  Insurance  Company  otters 
a  combination  Ufe  insurance  for  one  hundred  dollars 


266    OU)  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

and  annuity  poKcy  avaUable  to  industrial  workers, 
the  rates  of  which  are  given  at  various  ages  in  the 
following  table:  — 

TABLE  IX 
Cost  of  $ioo  Insurance  and  Annuity 


Puwini 

20 

•0.13 

as 

.16 

30 

.31 

35 

.37 

40 

•37 

45 

•S3 

SO 

.83 

Notwithstanding  all  the  elaborate  schemes  which 
the  life  insurance  companies  doing  an  industrial 
business  have  oflfered  workmen,  in  an  attempt  to  for- 
ward the  solution  of  the  old  age  dependency  problem, 
the  records  of  such  companies  show  that  very  few  of 
the  working  class  are  taking  advantage  of  these  plans. 
As  Mr.  Haley  Fiske,  Vice  President  of  the  MetropoK- 
tan  Life  Insurance  Company,  says  in  a  circular: 
"Insurance  companies  in  this  country  have  hitherto 
failed  to  find  any  considerable  demand  on  the  part 
of  the  insuring  public  for  annuities.   In  our  Ordinary 
Department,  we  publish  annuity  tables  the  same  as 
the  other  companies  do;  but  our  experience,  like  that 


PENSIONS  BY  PURCHASE 


267 


of  the  other  companies,  has  been  that  few  are  caUed 

for." 

The  reason  lor  this  evident  lack  of  appreciation  on 
the  part  of  the  working  classes  is  not  far  to  seek : 
The  returns  are  too  small  and  too  remote  for  the 
amount  of  self-denial  and  self-sacrifice  required  to 
be  espedaUy  attractive.   Thirteen  cents  a  week  to 
a  young  man  at  twenty  is,  to  be  sure,  a  small  amount ; 
but,  at  the  other  end  of  the  transaction,  one  hundred 
doUars  in  case  of  death  or  one  hundred  doUars  a  year 
for  life,  after  age  sixty-five,  is  also  too  small  to  make 
any  great  appeal  to  him.   One  thousand  dollars  in 
case  of  death,  or  one  thousand  doUars  a  year,  after 
age  sixty-five,  would  look  far  more  inviting  to  him; 
but  to  purchase  such  indemnity  one  doUar  and  thirty 
cents  a  week,  or  sixty-seven  dollars  and  sixty  cents  a 
year,  is  a  sum  the  extraction  of  which  from  his  poor 
little  wages  seems  appalling. 

Senator  Dryden  spoke  enthusiastically  of  the 
monthly  income  pohcy  which  he  described,  when  he 
said "Attention  may  be  called  to  the  thirty-year 
endowment  rate  at  age  thirty,  which,  according  to 
the  table,  is  only  forty-eight  dollars  and  thirty-one 
cents,  or  less  than  one  doUar  a  week.  Even  an  income 
of  but  ten  doUars  a  week,  with  reasonable  economy, 
ought  to  permit  of  a  saving  of  less  than  one-tenth  to 
« "Life  Insurance  and  Other  Subjects,"  page  127. 


268    OLD  AGE  DEPENDENCY  IN  THE  XJNITED  STATES 

provide  a  definite  income  to  the  insured  after  the  age 
of  sixty,  when  the  active  working  period  of  life  has 
practically  come  to  an  end.  By  this  payment  of  less 
than  a  dollar  a  week,  it  lies  within  the  power  of  prac- 
tically every  American  to  proWdc,  at  least  the  mini- 
mum of  subsistence,  with  certainty  Lr  his  own  future." 

It  has  been  shown  that,  without  a  radical  increase 
in  present  remuneration,  the  Ci\il  Service  employees 
at  Washington  register  a  strong  protest.  —  70  per 
cent  of  their  number,  —  against  even  a  non-contribu- 
tory pension  for  old  age.  How  then  can  it  be  expected 
that  the  average  wage-earner,  who  is  recei\ing  on  the 
whole  less  remuneration  for  his  time  and  strength  *han 
the  government  employee,  will  voluntarily  take  out  of 
his  meager  pay  a  sum  which  looks  to  him  comparatively 
enormous,  and  place  it  in  the  keeping  of  an  insurance 
company  for  the  purchase  of  an  old  age  annuity  ? 

It  must  be  borne  in  mind  that  the  criticisms  di- 
rected against  industrial  insurance  as  operated  in  this 
country  have  been  extensive  and  vituperative.  One 
writer  has  even  gone  so  far  as  to  characterize  such 
insurance  as  Httle  better  than  highway  robbeiy,  under 
the  forms  of  law,  and  an  exploitation  of  the  poorest 
anc.  !ieediest,  through  insurance  which  costs  them  two 
or  three  times  as  much  on  the  weekly,  as  the  more 
prosperous  man  pays  on  the  annual,  premium  plan.* 
» I.  M.  Rubinow  in  Journal  of  Political  Economy,  Vol.  XII,  page  380. 


PENSIONS  BY  PURCHASE  269 

Another  has  given  expression  to  the  same  thought  in 
iae  following  language :  *  — 

The  revelation  of  the  corruption  and  recklessness  which  has 
attended  the  management  of  some  of  the  largest  companies  is 
too  recent  and  too  well  known  to  require  repetition.  The  story 
of  greed,  fraud,  and  betrayal  of  trust  is  appalling.  Such  evils 
spread  ^^hh  so  deadly  and  so  rapid  a  contagion,  that  if  the 
revelation  had  been  long  postponed,  it  may  well  be  surmised 
that  the  whole  system  of  life  insurance  would  have  been  wrecked; 
at  least,  the  pubhc  confidence,  which  is  absolutelv  essential,' 
already  seriously  impaired  would  have  been  destroyed. 

The  revelations  above  referred  to,  it  must  be  con- 
ceded by  all  close  observers  of  the  conduct  of  life 
insurance,  have  brought  about  reforms  of  adminis- 
tration and  procedure,  both  by  reason  of  stringent 
legislative  enactment  and  powerful  pubKc  opim'on, 
which  have  eliminated,  to  a  large  extent,  the  evils 
complained  of.    Such  reforms,  however,  have  not 
materially  reduced  the  cost  of  insurance  to  the  work- 
ing classes,  especially  such  insurance  as  the  com- 
panies offer  as  indemnity  against  the  miseries  of  old 
age.    That  such  indemnity  is  provided  by  plans 
that  are  safe  and  permanent ;  that  it  is  as  full  and 
complete  as  the  rates  charged  for  it  will  permit,  — 
in  fact  that  it  is  desirable,  sane  and  safe,  —  no  work- 
ingman  will  deny.   The  only  excuse  he  gives  for 
failing  to  avafl  himself  of  it  is  that  it  is  beyond  his 
» Frank  W.  Lewis,  "State  Insurance," ;  ije  126. 


210    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

financial  ability.  The  companies  themselves  reaHze 
the  force  of  the  poor  man's  excuse.  Tliey  have 
accordingly  devised  a  plan  whereby,  could  it  be 
enacted  into  law,  it  might  Le  possible  to  bring  the 
benefits  of  old  age  insurance  within  the  reach  of  the 
average  wage-earner. 

This  plan  is  known  as  the  "group  insurance  plan" ; 
and  rests  upon  this  fundamental  actuarial  proposi- 
tion :  that  if  policies  can  be  issued  to  groups  of  at 
least  one  hundred  people,  the  indemnity  for  the  same 
amount  of  money  can  be  increased  by  at  least  30 
per  cent  over  what  is  now  possible  in  individual  pol- 
icies.   Some  attempt,  not  altogether  successful,  nor 
yet  olfering  very  great  hope  of  future  success,  has 
been  made  to  have  the  group  bill  enacted  into  law 
in  a  few  states.    If  the  life  insurance  companies, 
especially  those  operating  along  industrial  lines, 
could  devise  some  means,  either  through  the  adoption 
of  the  group  or  other  plan,  whereby  the  large  expense 
of  weekly  agency  collection  could  be  greatly  reduced, 
or  whereby  the  policy-holders  themselves  could  look 
after  the  local  end  of  the  business  by  cooperative 
association,  thus  reducing  the  cost  of  local  adminis- 
tration to  a  minimum,  there  might  be  some  hope  that 
the  schemes  of  purchase  pensions  which  are  offered 
would  receive  more  favor. 


PENSIONS  BY  PURCHASE  jy, 

B.  Deductions  from  Wages 
In  another  part  of  this  work,  under  "Efforts  at 
Relief,"  the  various  plans  for  voluntary  and  compul- 
sorv  deductions  from  eammgs,  for  the  purpose  of 
establishing  the  pension  right,  have  been  set  forth 
especially  in  the  description  of  retirement  funds  for 
teachers,  policemen  and  firemen.   Very  few  of  the 
industrial  corporations  have  embodied  the  contrib- 
uiory  principle,  whether  voluntary  or  compulsory, 
m  the  pension  schemes  thus  far  devised.  Smce' 
however,  G.  rmany  enacted  a  compulsory  invalidity 
and  old  age  insurance  law  in  1889,  on  the  contribu- 
tory  plan,  economists  on  this  side  of  the  Atlantic 
have  given  close  attention  to  the  working  out  of  the 
principles  underlying  the  contributory  plan;  and 
many  arguments  are  now  advanced  in  its  favor 
especially  with  reference  to  general  adoption  by  indus- 
trial corporations  and  other  large  employers  of  wage- 
earners.   These  arguments  are  succinctly  stated  by 
Magnus  W.  Alexander,  a  member  of  the  Massachu- 
setts  Commission  on  Old  Age  Pensions,  in  the  foUow- 
ing  language :  *  — 

In  general,  it  must  be  admitted  that  the  stress  of  modem 

ndustnal  bfe  makes  the  proper  care  of  aged  workers  a  prob- 
lem of  increasmg  economic  and  social  importance  and  neces- 


aya  old  age  dependency  in  the  united  states 

sity.  Unless,  therefore,  individual  employers  take  the  initia- 
tive in  working  out  a  suitable  solution  of  the  problem,  the 
state  will  be  obligwi  to  deal  with  this  matter  when,  under 
political  pressure  of  one  kind  or  another,  a  pension  program 
may  be  instituted  that  may  prove  burdensome  alike  to  the 
industries  and  the  industrial  workers,  and  demoralizing  to  the 
best  charact  r  development  of  the  peo[)le. 

On  the  other  hand,  it  is  clear  that  a  frequent  changing  of 
the  personnel  of  employees  is  expensive  and  ruinous  to  eco- 
nomical production.  To  devise  proper  means  of  lengthening 
the  period  of  service  of  satisfactory  employees,  hy  holding  out 
to  them  a  just  reward  for  long-time,  meritorious  employment, 
if  therefore,  a  matter  of  good  business  judgment ;  a  provision 
of  his  kind,  moreover,  will  attract  into  the  service  of  an  em- 
plo>.'r  well-intentioned  workers,  who  value  the  {)rospect  of 
steady  employment  and  the  outlook  for  a  more  or  less  inde- 
pendent old  age.  Finally,  the  r'ght  scheme  will  stimulate 
among  employees  habits  of  industry  and  steadiness,  and  will, 
therefore,  tend  to  increase  the  industrial  efficiency  of  employees. 

It  might  be  added  that,  from  the  standpoint  of  the 
whole  system  of  social  economy,  no  employer  has  a 
right  to  engage  men  in  an  occupation  that  exhausts 
the  individual's  industrial  life  in  ten,  twenty,  or  forty 
years ;  and  then  leave  the  renmant  floating  on  society 
at  large  as  a  derelict  at  sea.  From  the  standpoint 
of  public  economy,  it  is  argued  that  every  industry 
should  be  compelled  to  bear  its  own  burden  of  waste, 
whether  of  material,  machinery  or  human  life ;  that 
it  is  as  equally  ur '  ,t  and  improvident  for  an  industry 
to  turn  adrift  its  worn-out  and  aged  employees,  to 


PENSIONS  BY  PUSCHASE  273 

be  taken  up  and  housed  at  public  expe  nse  in  alms- 
houses, as  it  is  for  the  employee  himself  to  stop  work 
and  become  a  tramp  or  vagrant.  Those  who  are 
insistent  upon  the  system  of  compulsory  provision 
for  old  age,  through  the  .industry  which  employs  the 
laborer,  advocate  the  enactment  of  laws  in  this  country, 
whereby  each  industry  shall  be  compelled  to  take 
care  of  its  own  disabled  and  worn-out  human  factors. 

The  Massachusetts  Conmaission  on  Old  Age  Pen- 
sions recommended  to  the  legislature  the  form  of  a 
bill,  for  the  organization  of  voluntary  associations 
among  employers  and  employees  and  for  the  creation 
of  retirement  funds  in  individual  corporations,  to 
be  maintained  by  deductions  from  wages  of  employees, 
supplemented  by  employers'  contributions,  as  rewards 
for  long  and  satisfactory  service.    Doubtless,  in  the 
near  future,  corporations  gc    rally,  either  voluntarily 
or  through  state  compulsion,  will  undertake  the  estab- 
lishment of  old  age  retirement  systems  along  these 
or  other  lines.   There  is  very  grave  danger,  however, 
that  many  of  the  systems  devised  will  be  based  on 
erroneous  or  insufficient  premises. 

For  years  prior  to  the  adoption  of  the  Universal 
Pension  Scheme  by  the  British  Parliament,  many 
actuaries  in  Great  Britain  gave  the  whole  pension 
problem  serious  thou^t;  and  especially  all  plans 
for  retirement  pensions  in  industrial  establishments. 


374    0U>  AGE  DEPEMDXMCY  W  THE  UKIIEO  .lATKS 


Much  of  this  thought  was  crystallized  at  the  meeting 
of  the  Faculty  of  Actuaries  in  Scotland,  the  .  "^r 
part  of  1908. 

James  J.  M'Lauchlan,  In  his  inaugural  address 

as  President  of  the  Faculty  of  Actuaries,  in  Scotland, 
presented  the  advantages  of  such  retirement  system ; 

and,  at  the  same  time,  called  attention  to  some  of  the 
dangers  in  its  operation,  which  are  worthy  of  careful 
consideration  in  America.  The  following  quotations 
from  his  address  will  show  the  trend  of  his  thought : ' — 

I  assume  that  each  employee  pays  2]  per  cent  of  his  salary 
as  a  contribution  to  the  Fund,  and  that  the  employing  com- 
pany pays  another  aj  per  cent  on  his  behalf,  and  that  the 
benefits  are  as  follows:  (i)  a  pension  on  retirement  at  any 
time  after  reaching  age  sixty;   (2)  a  pension  of  a  reduced 
amount  corresponding  to  length  of  membership,  on  retirement 
in  impaired  health  before  reaching  age  nzty,  these  pensions 
to  be  at  a  uniform  rate  per  cent  per  aanum,  01  /erage 
salary  received  during  the  whole  period  of  -nemb'.  rship    (3)  a 
return  of  the  employee's  own  contributi  .is  withe  intcrt' 
on  withdrawal  from  the  Fund  in  consequence  of  leaving 
company's  service;  (4)  a  return  of  his  own  contributions  ! 
the  corresponding  contributions  of  the  company     =  L=  - 
interest,  in  the  evf  it  of  death  before  becoming  enlitlt  c! 
pension.   Retirement  is  compulsory  at  age  sixty-five,  ui 
special  permission  is  given  to  continue  on  the  active  list, 
extended  period  of  service  in  no  case  to  exceed  five  years. 

The  difficulties  and  dissensions  that  have  occurred  at  vari- 

*"The  Fundamental  Principles  of  Pension  Funds,"  Transactions 
of  the  Faculty  of  Actuaries,  Vol.  IV,  Part  Vn,  pages  196-197,  334, 
33$  and  226. 


OUS  1 


PENSIONS  BY  PUXCBASE  275 

times  in  connection  with  the  management  of  Pension  Funds 

Ii  ivi-  led  many  employers  to  the  conclusion  that  it  is  better  to 
t.uLlish  a  Pension  Scheme  than  a  Pension  Fund  When  an 
employer  establishes  a  Pension  Scheme,  Ik  simply  intimates 
that  he  will  pay  to  his  employees  pensions  according  to  a  cer- 
tarn  scale,  subject  to  certain  conditions.  These  pensions, 
therefore,  become  part  of  the  consideration  for  wh-ch  his  em- 
ployees give  their  services.  In  this  way  he  reuins  absolute 
control  of  the  whole  arrangemenu.  In  certain  circumstances 
this  IS  probably  the  best  course. 

From  the  employing  company's  point  of  view,  the  ad- 
vantages of  the  Pension  Scheme  are:  (i)  that  the  company 
retams  entire  control  of  the  arrangements,  and  none  of  the 
difficulties  that  I  have  mentioned  in  the  course  of  this  address 
can  arise;  (2)  that  the  company  does  not  require  to  make 
any  contributions  whatever  in  the  case  of  employees  who 
withdraw  or  die  before  becoming  entitled  to  pension. 

The  advantages  of  the  Fund  are:  (i)  that  the  cost  of  pro- 
viding the  pension  of  an  employee  falls  upon  the  period  when 
he  is  in  acUve  service,  instead  of  faUing  on  the  period  of  his 
superannuaUon.  The  payments  towanis  the  cost  of  the  pen- 
n,  being  spread  u\  cr  a  much  longer  period,  and  being  made 
"luch  earlier  in  point  of  time,  are  necessarily  mu(  h  lighter. 
In  the  case  of  the  Model  Fund,  which  I  have  described  above, 
a  sum  of  3.739  per  cent  on  the  salaries  paid  all  along  and  ac- 
cumulated at  interest,  is  sufEcient  to  provide  for  the  pensions; 
but  if  nothing  is  put  aside  until  the  pensions  themselves  be- 
come payable,  t^    cost  will  ultimately  amount  to  14  per  cent 
the  salaries.    (2)  The  payments  required  for  keeping  up  a 
Pension  Fund    re  fairly  constant  from  year  to  year,  and  the 
existence  of  uch  a  Fund  equalizes  the  strain  of  providing  for 
the  superannuation  of  the  employees.   This  applies  not  only 
to  the  increase  in  the  pension  list  caused  by  the  increasing  age 
*f      employees,  but  also  to  the  fluctuations  caused  by  occa- 


276    OLD  ACE  1    PENDENCY  IN  THE  UNITED  STATES 


sional  retiring  allowances  of  relatively  large  amuunt  becoming 
payable.  As  roRanls  the  latter,  the  Pension  Fund  acts  as  a 
buffer  between  the  funds  of  the  employing  company,  and  the 
actual  payments  to  the  superannuated  employee.  It  must 
always  be  remembered,  however,  that  companies  having  Pen- 
sion Sfhcmes  can  stn  nrc  for  themselves  all  these  advantages  of 
Pen.->ion  Funds,  by  seltinf?  "n  good  time  a  special  fund  of 
suitable  amount,  to  prr>- ;  •  .^ons  for  their  employees,  and 
making  all  payments  for  :       .  ns  out  of  that  Fund. 

From  tVe  employers'  point  of  view,  the  prin(  i[)al  advantr.ge 
of  the  Pension  Fund,  as  compared  with  the  Pension  Scheme,  is 
the  somewhat  better  security,  whkh  the  former  sometimes 
affords,  that  the  pension  will  be  paid.  In  the  case  of  the  Civil 
Ser\  ice  of  the  country,  and  the  services  of  our  well-establislud 
banks  and  insurance  companies,  the  pensions  promised  to  the 
employees  are  no  doubt  just  as  sure  to  be  paid  as  if  they  were 
paid  out  of  a  separate  Pension  Fund ;  but  there  are  many 
large  and  important  und  rtakings  where  the  future  of  the 
business  is  not  free  from  uncertainty,  and  where  it  is  quite 
cona  -able  that  the  company  might  have  to  be  wound  up,  or 
migl.  come  unable  :o  pay  the  pensions  that  had  been  promised 
to  its  oinployecs.  In  such  a  case  as  that,  the  Pension  Fund, 
as  a  separate  institution,  would  fully  protect  the  interests  of 
nil  those  who  had  contributed  to  it.  Again,  there  are  certain 
circumstances  in  which  a  Pension  Scheme  is  inapplicable. 
When  a  number  of  persons  who  have  no  common  employer 
form  an  association  to  provide  each  other  with  pensions,  the 
only  course  open  to  them  is  to  establi^  a  Pension  Fund. 

The  facts  and  considerations  which  I  have  put  before  you 
to-day  seem  to  me  to  show  clearly  that  Pension  Funds  such  as 
I  have  described,  are  based  on  thoroughly  sound  principles; 
and  that  this  is  capable  of  being  made  clear  to  men  of  ordinary 
business  training,  who  will  give  the  necessary  time  and  atten- 
tion to  the  consideration  of  \Jae  subject.  At  the  same  time,  it 


PT\^\OS1^  HY  PURCHASE 


377 


is  necessary  to  point  out,  that  the  fnu,-.  ,..  „ 
ncction  with  those  Funds  are  highly  cmphcateU,  and  that 
the  amounts  of  the  benefiu  and  the  conditions  on  which  they 
are  to  be  paid,  cannot  safely  be  arranged  or  altered  without 
expert  advice.  This  is  the  mon-  necessary,  as  the  correctneM 
Of  the  pnnc.ples  uiwn  which  liie  Fund  is  esUblished  and 
managed  will  probably  not  be  brought  to  the  test  of  experi- 
ence, -ntil  after  a  long  period  of  time. 

Mr.  MXauchlan  is  not  the  only  actuary  who«e 
voice  has  been  heard  in  warnings  against  the  dangers 
of  ccrporatiou  peixsion  schemes  being  established  and 
carried  on  without  competent  advice.  Mr.  Geoige 
King  calls  attention  to  the  difficulties  in  devfeing  such 
a  scheme,  in  the  following  language :  >  — 

The  real  fact  is,  that  the  more  one  studies  such  a  thorny 

question  as  this,  the  more  numerous  and  the  greater  are  the 
difficulties  which  become  apparent  and  the  more  it  is  ser^n 
that,  if  the  working  classes  for  whose  benefit  Old  Age  Pen- 
sions are  advocated  are  not  to  be  injured  rather  than  aasis»«i 
the  utmost  caution  and  deliberaUon  must  be  exercised  befor^ 
any  irrevocable  step  be  taken. 

The  danger  to  which  Mr.  M'Lauchlan  and  Mr. 
King  refer  in  the  above  quotations,  viz.,  a  pension 
"scheme,"  established  by  a  corporation  and  to  be 
aaintained  out  of  the  profits,  without  contributions 
from  employees,  is  not  the  only  objection  that  has 
been  raised  against  this  kind  of  provision  against  old- 


278    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

age  want  among  wage-earners.  That  which  the  more 
thoughtful  of  this  class  themselves  urge  against  the 
plan  is  that  it  restricts,  even  to  the  point  of  preven- 
tion, the  mobility  of  labor.  The  employer  is,  of  course, 
to  be  commended  for  desiring  to  retain  in  his  service 
men  of  experience  and  skill,  —  experience  and  skill 
obtained  under  the  employer's  tutelage  and  perhaps 
even  at  his  expense,  —  and  esteemed  as  essential  to 
the  welfare  of  the  plant.  Not  infrequently  docs  the 
employe  boldly  announce  that  this  is  the  object 
aimed  at  in  the  establishment  of  a  non-contributory 
pension  system ;  as,  for  instance,  the  general  notice 
sc!\t  out  to  employees  by  the  Chicago,  Rock  Island 
and  Pacific  Railroad  Company  in  the  establishment 
of  its  pension  scheme,  December  11,  1909,  contains 
the  following  statement:  "The  system  adopted  calls 
for  no  contributions  from  the  employees  themselves. 
The  company  hopes  by  thus  establishing  a  system 
under  which  an  income  will  be  assured  to  those  who, 
after  years  of  continuous  service,  are  by  age  or  infir- 
mity no  longer  able  to  perform  their  duties  and,  without 
which,  they  might  be  left  entirely  without  means  of 
support,  to  build  up  among  them  a  feeling  of  perma- 
nency in  their  cmplo>Tnent,  an  enlarged  interest  in 
the  company's  weUare  and  a  desire  to  remain  in  and 
devote  their  best  efforts  to  the  comiianj  's  service." 
The  pension  system  operated  by  tlie  employer  acts 


PENSIONS  BY  PURCHASE  279 

as  discouragement  against  the  employee  going  else- 
where, either  for  reasons  of  health  of  himself  or  family, 
or  for  greater  opportunities  of  advancement  or  for 
any  other  advantage  that  might  appeal  to  him.  His 
remaining  anchored,  so  to  speak,  in  one  place  or  to 
one  concern  may  be  a  decided  economic  loss  to  the 
industrial  community.   It  is  said  that  many  a  pro- 
fessor in  Columbia  College,  during  a  long  period  of 
years,  declined  urgent  invitations  and  larger  salaries 
with  other  colleges  or  universities,  being  influenced 
in  his  declination  by  the  fact  that  Columbia  had  in 
operation  a  pension  scheme,  to  which  he  could  look 
forward  as  a  dependence  for  his  old  age;  whereas, 
if  he  left  Columbia,  he  lost  whatever  interest  his 
accumulated  service  gave  him  in  that  fund.  The 
establishment  of  the  Carnegie  Foundation,  however 
has  now  made  it  possible  for  a  teacJier  to  move  from' 
one  higher  institution  of  learning  to  another  without 
jeopardizing  his  prospect  of  a  pension;   and  thus 
newer  sections  of  the  country  may  receive  the 
benefit  of  the  experience  and  knowledge  which  a 
coUege  professor  in  the  older  institutions  may  have 
acquired. 

Therefore,  if  compulsory  provision  for  old  age 
must  be  made  by  deductions  from  wages,  the  American 
system  should  be  made  as  elastic  as  is  the  compulsory 
government  system  in  Germany,  in  order  that  an 


28o    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

employee  leaving  one  corporation  for  another  may 
take  with  him  his  acomiulated  credits,  both  in  deduc- 
tions from  wages  and  bonuses  for  service,  and  deposit 
them  with  his  new  employer;  so  that  he  shall  not 
be  depri\  ed  of  the  benefit  of  the  provision  accumu- 
lated against  the  necessities  of  old  age. 

Another  objection  that  is  more  frequently  urged 
by  the  laboring  class  against  this  system  is  that  the 
employee  becomes  a  sort  of  chattel  property  of  the 
employer.  ^  The  employer  is  free  to  discharge  him, 
cut  down  his  wages  or  to  shift  him  from  an  agreeable 
to  an  undesirable  line  of  work.  He  must  submit 
without  resistance.  Moreover,  if  there  is  a  concerted 
movement  among  the  members  of  his  labor  union  to 
improve  conditions,  right  wrongs  or  secure  higher 
wages,  he  is  bound  hand  and  foot.  He  must  not  take 
part  in  any  such  movement  that  might  be  construed 
by  his  employer  as  detrimental  to  the  employer's 
interests.  If,  after  fifteen  or  twenty  years  of  service, 
even  when  the  pension  is  in  sight,  he  should  be  forced 
by  his  union  obUgations  into  an  apparent  hostility 
to  his  employer,  he  is  discharged,  and  forfeits  all  the 

» Congressman  Berger,  in  his  speech  on  the  Pension  Service  Bill, 
August  7,  191 1,  before  the  House  of  Representatives,  Congressional 
Record,  Vol.  47,  No.  no,  page  3914,  asserts  that  the  present  industn'al 
corporation  pension  schemes  in  this  country  transform  the  free,  inde- 
pendent American  into  a  Middle  Ages  serf,  and  will  result  in  a  mod- 
ern industrial  feudalism  more  deplorable  than  that  which  prevailed  in 
Europe  hundreds  of  years  ago. 


PENSIONS  BY  PUKCHASE 


28X 


accumulations  he  has  made  voluntarily  or  compul- 
sorily  to  the  pension  fund.  It  is  this  consideration 
largely  which  has  restrained  the  wage-earners,  as  a 
class,  in  this  country  from  accepting  with  the  enthu- 
siasm that  was  e}q>ected  the  employment  pension 
scheme.  Only  recently,  when,  after  a  bitter  contest 
between  a  metropolitan  street  railway  company  and 
its  employees,  the  company  annoxmced  that  employees 
who  were  faithful  to  the  company  thereafter  would 
be  retired  on  pension  after  a  given  number  of  years' 
service,  without  any  contributions  on  their  part, 
the  employees  regarded  the  announcement  with  un- 
concern which  was  little  short  of  disdain.  That  such 
a  spirit  prevails  may  be  deplorable,  unfortunate  and 
even  detrimental  to  the  welfare  of  the  great  wage- 
earning  class;  but  that  the  spirit  does  prevail  can- 
not be  denied. 

Another  objection  that  the  wage-earners  of  this 
country  make  to  this  plan  is  that  the  deduction  from 
their  remuneration  reduces  their  wages  below  the 
living  point ;  and  that  the  tendency  has  been  for  the 
employer  to  make  a  still  further  reduction  to  reim- 
burse him  for  the  contribution  which  he  makes  to  the 
pension  fund  on  their  behalf.  In  discussing  the  effect 
of  the  compulsory  system  in  Germany,  Professor 
Seager  says:  ^  "There  certainly  appears  to  be  some 
'  Heniy  Rogm  Seager,  "Social  Insurance,"  page  132. 


282     OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

evidence  that  now  that  the  discussion  of  the  system 
has  largely  ceased,  wage-eamers  think  of  their  wages 
ns  what  is  left  <'fter  employers  have  made  the  deduc- 
tions which  the  law  requires,  and  look  upon  those 
deductions  as  taxes  to  which  they  are  subject,  without 
giving  much  th  .ght  to  the  fact  that  the  proceeds 
may   ultimately   be   expended   for   their  benefit." 
These  ;,omp'!'  ^r>  deductions  are  denounced  by  the 
laboring  men  as  un-American,  unnecessary  and  inju- 
rious.   The  man  with  the  dinner  pail  makes  the  asser- 
tion that  he  can  do  his  saving  for  himself ;  that  all  he 
asks  is  an  equitable  share  of  the  products  of  the  indus- 
try to  which  he  contributes  his  time  and  st'-ength. 
Pay  him  what  he  really  earns  in  a  proper  distribution 
of  the  wealth  which  the  corporation  employing  him 
creates,  and  ne  does  not  need  the  assistance  of  his 
employer  to  provide  against  the  necessities  of  old 
age.   This  assertion  may  be  bold  to  the  point  of 
impudence.    It  may  be  inspired  by  real  improvidence 
and  unw.trranted  conceit;  but  again,  this  spirit  pre- 
vails and  must  be  reckoned  with. 

For  these  and  man;  --ther  reasons  that  need  not 
be  recounted  at  len}.  the  p.oposed  system  of 
preventing  old  age  dependency,  by  means  of  pen- 
sions purchased  bv  deductions  from  wages,  has  not 
proved  popular  or  attractive  to  the  wage-earner  in 
America. 


PENSIONS  BY  PURCHASE 


C.  State  Annuities 

The  establishment  of  state  agencies  for  the  granting 
of  annuities  has  been  of  very  slow  growth  in  this 
couiitry.  In  only  two  states  has  there  been  any 
attempt  whatever  along  this  line,  with  what  result 
will  be  considered  after  a  brief  description  of  such 
governmental  agende"-  in  other  countries. 

A  postal  annuity  la  v  was  enacted  in  England  in 
1864.  It  was  urged  by  Mr.  Gladstone  for  the  pur- 
pose of  bringing  a  desirable  form  of  insurance  within 
the  reach  of  the  working  people,  who  complained  in 
tliat  country,  as  they  do  in  this,  that  they  could  not 
pa\'  the  high  prices  charged  by  the  insurance  com- 
panies for  indemnity  against  old  age.  The  plan  was 
to  make  certain  specified  post  oiFices  state  insurance 
agencies  for  the  issue  of  policies  and  receipt  of  pre- 
miums. The  minimum  annuity  that  could  be  pur- 
chased through  one  of  these  agencies  was  £4  ($20) 
and  the  maximum  £50  ($250)  per  annum. 

In  1882  the  House  of  Commons  appointed  a  com- 
mittee to  investigate  the  operation  of  the  scheme. 
The  committee  reported  that  wage-earners  made  little 
use  of  it,  because  the  system  was  hedged  about  with 
official  formalities,  which  were  irksome;  and  the  work- 
ingman  would  not  incur  the  time  or  expense  to  seek 
out  one  of  the  limited  post  offices  that  were  author- 


384    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

ized  to  traiisact  this  business.  The  recommendations 
made  by  this  investigating  committee  resulted  in  the 

transfer  of  the  government  insurance  and  aimiiity 
business  to  the  savings  b.mk  post  oflSccs,  and  in  fixing 
the  maximum  that  might  be  purchased  at  £ioo. 
In  1292  furtlicr  changes  in  the  plan  were  made, 
especially  a  reduction  of  the  rates. 

In  1907  anotluT  committee  was  appointed  to  make 
further  inquiry  rela  , .  to  the  slow  growth  of  the 
business,  which  reported  as  follows:  "We  are  coi.- 
vinced  that  one  of  the  chief  causes  of  the  stagnation 
of  the  system  is  to  be  found  in  the  want  of  publicity 
from  which  it  has  suffered.  We  gather  that  the  very 
existence  of  the  system  is  unknown  to  the  great  bulk 
of  the  wage-earning  classes;  and  those  who  have 
heard  A  it  are  very  imperfectly  acquainted  with  its 
conveniences  and  cheapness."  It  vas  found  by  the 
committee  that  the  average  number  of  new  annuity 
contracts  issued  per  year  was  about  one  himdred  and 
fifty.  'Jompared  with  the  like  business  of  commercial 
insurance  companies,  with  which  the  scheme  was 
designed  to  compete  i..  the  interest  of  the  working 
classes,  the  government  annuity  business  was  abso- 
lutely insignificant. 

Caisse  Gencrale  d'Epargne  d  de  Rclniile,  or  Super- 
annuation Fund  Bank,  '.as  been  in  operation  as  a 
savings  institution  under  state  control  in  Belgium 


PENSIONS  BY  PURCHASE  385 

since  1850.   This  differs  from  the  English  state  annu- 
ity scheme  in  this,  that  the  government  assists  deposi- 
tors by  adding  to  their  deposits  according  to  the  follow- 
ing scale :  If  the  depositor  was  bom  before  January  i, 
1850,  the  government  contribution  is  two  francs  on 
each  of  the  first  six  francs  deposited,  and  sixty  centimes 
(12  cents)  on  each  franc  thereafter  up  to  twenty-four 
francs.   The  depositor,  therefore,  can  obtain  an 
annuity  credit  at  the  bank  to  the  amount  of  28.80 
francs  per  year  (S5.76).    If  the  depositor  was  bora 
after  January  i,  i860,  the  government  allows  him  a 
credit  of  sixty  centimes  (12  cents)  on  each  franc  up 
to  the  first  fifteen  francs  deposited  each  year,  making 
it  possible  to  obtain  a  total  minimum  credit  of  nine 
francs  a  year  ($1.80).    This  is  really  a  scheme  for 
encouraging  thrift  and  has  proved  very  popular 
among  the  better  paid  working  people,  — that  is, 
those  whose  earnings  permit  of  even  small  sav- 
ings. 

France  has  had  a  system  similar  to  that  in  Belgium, 
since  1850,  —  Caisse  Nationale  des  RetraUes  pour  la 
Viellesse,  or  National  Bank  of  Superannuation  for 
Old  Age,  —  a  scheme  for  voluntary  annuities  with 
government  subsidies. 

However,  concerning  these  three  national  schemes 
which  have  been  in  operation  so  many  years  in 
Europe,  Edward  Bunnell  Phelps,  in  an  article  on  "The 


286    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

Drift  toward  Old  Age  Pensions,"*  sums  up  as 
follows :  — 

England's  attempt  to  induce  workingmen  to  purchase 

deferred  annuities  through  the  medium  of  its  post  office, 
though  launched  more  than  forty  years  ago,  has  met  with  a 
similar  experience.  In  its  first  seventeen  years,  only  11,646 
annuities  —  both  immediate  and  deferred  —  were  taken  out, 
and  for  many  years  the  average  number  of  deferred  annuities 
taken  has  been  scarcely  one  hundred  and  fifty  a  year.  In 
other  words,  for  something  like  half  a  century,  the  efficiency  of 
deferred  annuities  to  be  purchased  voluntarily  has  been  tried 
out  by  three  European  nations  and  has  been  found  hopelessly 
wanting  as  a  remedy  for  the  problem  in  the  case  of  the  working 
classes. 

As  intimated  above,  two  states  in  the  American 
Union  have  adopted  the  plan  of  voluntary  state  annu- 
ities,— Massachusetts  in  1907,  and  Wisconsin  in  191 1. 

In  Massachusetts  the  plan  is  operated  through  such 
savings  banks  as  may  meet  the  reqtiirements  of  the 
law  by  the  creation  of  special  insurance  guarantee 
fimds,  etc.,  and  the  amount  of  annuity  that  may  be 
purchased  on  any  one  life  through  the  bank  is  two 
himdred  dollars  per  annum.  No  solicitors,  or  hotise- 
to-house  canvassers  or  collectors,  are  allowed.  The 
plan  was  devised,  as  was  that  in  England,  for  the  pur- 
pose of  placing  annuities  and  other  insurance  within 
the  reach  of  the  common  people,  by  eliminating  the 

'  Tke  American  UndermUer,  Vol.  XXX,  No.  $  January,  1909), 
page  138. 


PENSIONS  BY  PURCHASE  287 

expense  element,  which  was  found  for  insurance  com- 
panies doing  an  industrial  business  in  Massachusetts 
to  be  about  40  per  cent  of  the  premiums  paid  on 
insurance  of  tliis  kind.  The  rates  were  made  very 
attractive,  as  is  apparent  in  the  following  table :  — 


TABLE  X 
Massachusetts  Annuity  Rates 


Aoa 

Monthly  Hi  pn-cn*;  vor 
tioo  Anni  itv,  be- 
GiMNiMG  Ar  Age  60 

Ml)^•TtIl.^  I)i  POSITS  fob 
$100  Annlttv,  be- 
UIN.MINC  AT  Age  6s 

20 

I0.82 

$0.48 

as 

1.07 

.63 

30 

1.42 

.81 

35 

1.96 

1.09 

40 

3.79 

LSI 

45 

4.28 

2.19 

50 

7-39 

3-39 

The  above  rates  are  for  what  is  known  as  a  Simple 
Annuity  Policy,  which  guarantees  the  insured  the 
annuity  wliich  he  has  purchased,  when  he  reaches  the 
age  specified  in  the  policy.  In  the  event  of  his  dj'ing 
before  reaching  that  age,  the  premiums  paid  by  him 
are  not  returned  to  his  family.  It  ma\-  be  remarked 
that  the  rates  for  women  are  somewhat  liigher  tnan 
for  men. 

There  is  also  a  return  premiu  rmty  policy 
which  provides  that,  in  case  of  the  dt  the  insured 
before  reaching  the  pension  age,  all  premiums  paid 


a88    OLD  AOZ  DEZ'ENDENCy  IN  TEE  UNITED  STATES 

by  him  shall  bo  returned  to  his  beneficiary.  The  rates 
on  this  policy  are  somewhat  higher,  as  will  be  seen  in 
the  following  table :  — 


TABLE  XI 

Mi»ssAriiesF,TTs  ANScirv  Rat«8 
(Premiums  Ktiurnabk) 


AOE 

MoNTRiv  DcMsin  roB 

•  loo  Ann  JIT  V, 
filonnaim  at  Agb  te 

Moimiiy  DtMsm  nx 

lioo  Anndity, 
Bbgimnino  at  Aoc  6s 

ao 

I0.99 

S0.68 

as 

1.33 

0.83 

30 

1.76 

1.08 

35 

2-39 

1.44 

¥• 

336 

1.98 

45 

S-oa 

a.8i 

SO 

8.37 

4- 23 

The  banks  also  issue  a  combination  insurance  and 
annuity  policy  which  provides  for  a  definite  annuity 
on  reaching  the  age  of  sixty-five ;  and,  in  case  of  death, 
either  before  or  after  reaching  the  pension  age,  a  defi- 
nite amount  of  indemnity  or  funeral  benefits  to  the 
beneficiary.  The  rates  for  such  a  policy  at  given  illus- 
trative ages  are  found  in  the  table  on  the  opposite  page. 

Within  sixteen  months  after  this  plan  was  placed 
in  operation,  2575  policies  were  issued  by  the  People's 
Bank  of  Brockton  and  the  Whitman  Savings  Bank, 
representing  about  $1,000,000  in  insurance.  A  very 
small  portion  of  this,  however,  was  on  the  annuity 


PENSIONS  BY  FUKCBASX 


389 


TAni.F.  XII 
Massachusetts  Combisatkj.n  Policy  Rates 


Isoo  Insoancs  to  A<.r.  f.,.  hi; II  Lift  Anmcrv 
AT  Ace  65,  ImuiANCK  thkv  Diuinisses  it  m 
Amoumt  or  Annuu  v  Rkclivcd 


Iseo  iMiuaace  wu) 
$  leo  Annuity 


tsoelotonoctMid 
t«»  Aanaky 


Ian 


20 

$1.12 

I1.47 

-s 

'•33 

1. 81 

.■3 

1. 61 

3.34 

1.98 

3.8s 

4- 

2-5' 

3-74 

4? 

S-iS 

SO  i 

475 

7.60 

nK'  56        ies,  out  of  1499  issued  by  the 

tin  n  Ssvni^.-  Bank,  calling  for  annuities;  the 
iraouTu  of  the  business  being  endowment  at 
V  '  venty-year  endow-ments,  since  the  banks 
mly  annuity  policies,  but  endowments, 
J  1!'  'nited  pa>Tnent  life,  term  insurance, 
i<  ;iey  may  do  a  general  insurance  business, 
ting  annuities  is  a  very  small  part, 
highly  recommended  by  those  who  have 
giw  Ua  ciul  »nMderation,as,  for  instance,  the  Wage- 
earners'  Insurai  .„e  Committee  of  the  Boston  Merchants' 
Association,  which,  in  a  report,  recounts  the  well- 
known  financial  security  of  savings  banks  imder  strict 
state  supervision,  concenung  which  the  committee 
states,  "These  safeguards  give  the  policyholder  a  much 


290    OLD  AOE  DEPENDENCY  Of  THE  UNITED  STATES 


greater  measure  of  moral  and  financial  security  than 
that  afforded  by  any  insurance  company  in  existence." 

Louis  D.  Brandeis,  tjq.,  who  is  really  the  author 
of  this  savings  bank  insurance  scheme  in  Massachu- 
setts, states,  under  date  of  November  i8, 1909 :  "The 
success  of  our  savings  insurance  movement  has  been 
very  great,  and  comparatively  few  people  realize  how 
great  it  has  been.  They  are  apt  to  mer  »» the  suc- 
cess only  by  the  amount  of  insiu-anc^  •  ^.  Meas- 
ured even  by  that  standard,  I  thi:  system  has 
done  well,  because  the  million-dollar  li.  .rk  was  reached 
in  a  little  over  a  year  after  the  system  was  put  into 
operation,"  etc.  Mr.  Brandeis  further  justifies  the 
establishment  of  the  s}stem  in  the  state  by  pointing 
out  the  great  advantages  that  will  accrue  to  the  work- 
ing people  in  the  saving  this  kinu  of  insurance  affords 
»or  them,  by  the  elimination  of  the  heavy  expense  ele- 
ment above  referred  to;  and  further,  by  the  estab- 
lishment of  just  and  equitable  treatment  which,  be- 
fore the  introduction  of  the  savings  bank  insurance 
scheme  in  the  state,  was  not  generally  accorded  the 
industrial  policyholders  of  the  insurance  companies. 

The  system  has  been  in  operation  in  Massachusetts 
too  short  a  time  to  permit  any  prediction  of  its  effi- 
ciency as  a  remedy  for  the  financial  ills  of  the  aged 
poor.  The  fact,  however,  that  Liuc'^  a  '  :<ill  propor- 
tion of  the  patrons  of  the  scher  •  ha  -e  >i-  vet  availed 


PENSIONS  BY  PURCHASE  291 

themsel\  es  of  the  annuity  features  of  it  is  an  indica- 
tion that  this  part  at  least  of  the  plan  is  not  likely 
to  prove  popular. 

The  Icj^islature  of  Wisconsin  enacted  in  ihc  early 
part  of  191 1  a  Stale  Life  Fun'l  Law  "to  provide 
for  the  administration  by  the  state  of  a  Life  Fund  for 
granting  life  insurance  and  i)a\  in^  old  a^'c  annuitie  " 
The  law  provides  that  policies  of  life  insurance  may  be 
issued  to  citizens  of  Wisconsin,  between  the  ages  of 
twenty  and  fifty  years,  in  amounts  of  live  hundred 
dollars,  or  multiples  thereof,  but  not  to  exceed  three 
thousand  dollars  to  any  one  person;  and  annuities 
to  begin  at  the  age  of  sixty  years,  or  more,  in  sums  of 
one  hundred  dollars,  or  multiples  thereof,  not  e.rneed- 
ing  three  hundred  dollars.  The  insurance  commis- 
sioner will  have  charge  of  the  business;  but  no  agents 
are  to  be  employed,  except  state  factory  inq)ectors 
state  banks  and  county  and  municipal  clerks  and 
treasurers,  —  a  commission  cf  twenty-five  cents  for 
each  applicant  being  allowed.    Those  who  I  .vf?  :it 
heart  the  welfare  of  the  aged  poor  will  await  ai^.Jously 
the  results  of  the  armuity  part  of  the  scheme. 

The  Canadian  government  annuities  sch»'me,  put 
into  operation  in  1908,  is  one  of  the  most  complete, 
far-reaching  and  scientific  attempts  .  ver  made  b_\  any 
government  to  solve  the  old  age  dependency  problem 
by  the  purchase  of  annuities  imder  state  supervision. 


292    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

The  act  was  prepared  by  the  Right  Honorable  Sir 
Richard  Cartwright;  and  passed  the  Senate  and 
House  of  Commons  without  a  dissenting  voice. 

It  makes  it  possible  to  pay  premiums  at  any  time 
at  any  post  office,  savings  bank  or  money  order  office, 
or  direcUy  to  the  Department  at  Ottawa.   Among  the 
many  advantages  which  the  government  sets  forth 
in  its  Uttle  pamphlet  on  "Comfort  and  Happiness  in 
Old  Age,"  are  the  following:  That  the  annuity  can- 
not be  seized  for  debt  of  any  kind.    It  cannot  be  for- 
feited.   It  is  inalienable.    It  may  be  in  any  amount 
one  desires,  from  fifty  dollars  to  six  hundred  dollars,  — 
whatever  he  pays  for.    One  may  pay  in  only  twenty- 
five  cents  a  week  or  as  many  dollars.   He  may  pay 
weekly,  monthly,  quarterly,  half-yearly  or  yearly. 
If  pa>-mcnts  are  interrupted  by  sickness,  loss  of  em- 
ployment or  other  cause,  there  is  no  penalty  prescribed, 
and  there  can  be  no  lapse.   If  payments  are  not  con- 
tinued to  the  end  of  the  contract,  such  annuity  as 
will  be  purchased  by  the  payments  actuaUy  made 

will  be  granted. 

Various  plans  of  annuity  are  offered,  —  a  straight 
annuity,  or  a  combination  annuity  and  death  benefit 
insurance,  or  a  return  premium  plan,  etc.  Employers 
of  labor  may  contract  for  annuities  for  their  employees 
or  may  assist  employees  in  the  purchase  of  annuities. 
A  society  or  lodge,  fraternal,  benevolent,  religious,  or 


PENSIONS  BY  PURCHASE 


Other  association  may  contract  for  annuities  for  its 
members. 

In  fact  the  scheme  is  one  of  the  most  unique  and 
complete  plans  of  old  age  pensions  yet  devised  by 
government  or  private  enterprise.  A  writer  in  the 
World's  Work  magazine  describes  it  thus:  "The  plan 
seems  simplicity  itself.  It  is  the  savings  bank,  the 
insurance  company,  and  the  government  bond  rolled 
into  one,  in  a  shape  adapted  to  the  smallest  of  deposi- 
tors." It  is  worthy  of  the  most  careful  study  by 
economists  and  legislators  who  are  inclined  to  the 
opinion  that  the  plan  of  purchasing  annuities  through 
the  state  will  aid  in  the  ^.cilution  of  the  old  age  depend- 
ency problem. 

Experience,  however,  does  not  afford  much  ground 
of  hope  that  working  people  will  take  any  general 
advantage  of  the  opportunities  available  through 
various  channels  for  purchasing  annuities  for  old  age. 
This  conclusion  is  forcefully  presented  by  Edward 
Bunnell  Phelps  in  an  article  on  "The  Drift  toward 
Old  Age  Pensions"  ^  from  which  the  following  quota- 
tion is  made :  — 

To  be  sure,  endowments  and  deferred  annuities,  payable  at, 
say,  sixty-five  or  seventy,  might  be  purchased  of  the  insurance 
companies  —  and  for  many  years  some  of  the  European  gov- 

'  The  American  Underwriter,  New  York,  Vol.  XXX,  No.  5,  page 

136,  January,  1909. 


fi 


11 


t,-  t- 


294    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

emments  have  offered  to  seU  smaU  annuities  with  governmental 
guarantee  behind  them  to  all  who  might  wish  to  buy  ihcm; 
but  the  average  workingman  has  felt  that  aU  his  earnings 
were  needed  in  order  to  make  ends  meet  in  his  everyday  life, 
and  that  higher  priced  endowments  and  annuities  were  hope- 
lessly without  the  reach  of  his  slender  purse.    Then  again,  as 
Charles  Booth  so  well  put  the  case  of  deferred  annuities  in  his 
work  on  "Old  Age  Pensions  and  the  Aged  Poor,"  '"I  shall 
never  Uve  tiU  then'  is  a  pessimism  very  natural  to  the  young, 
especially  as  it  justifies  the  immediate  enjoyment  of  the  money 
which  is  demanded  for  a  remote  and  uncertain  contingency." 
Hence,  whQe  the  plodding  industrial  insurance  agents  might 
persuade  the  workingman,  or  even  the  day  laborer,  to  pur- 
chase for  a  few  cents  a  week  enough  life  insurance  to  bury 
him,  and  millions  of  workingmen  in  both  Europe  and  .\merica 
have  insured  in  Friendly  Societies  and  fraternal  orders  for  the 
benefit  of  their  famiUes  in  case  of  their  own  deaths,  practicaL'y 
an  of  them  have  been  without  the  slightest  assured  protection 
against  the  contingency  of  non-productive  old  age. 

It  was  the  realization  of  this  sober  fact,  affecting  almost 
countless  millions  of  men,  that  set  men  of  humanitarian  in- 
stincts thinking  on  this  subject.    And  the  more  they  thought, 
.nd  interchanged  thoughts,  and  studied  the  various  phases  of 
this  complex  problem,  with  its  endless  sot  iological,  psychological, 
political,  and  economic  ramifications,  the  more  convinced  they 
became  thn  something  must  be  lacking  in  a  code  of  civilized 
society,  which  apparently  left  without  any  tangible  resource, 
other'than  the  poorhouse,  the  vast  majority  of  humans  who 
had  faithfully  worked  and  labored  for  haU  a  century  or  more, 
but  at  last  had  reached  the  non-productive  age.    Thus  was 
born  tlie  theory  of  old  age  pensions  -  either  contributory  or 
non-contributory -as  the  only  workable  solution  of  the  great 
problem,  in  which  the  masses  of  aU  civilized  countries  were  so 
deeply  concerned. 


CHAPTER  III 


Pensions  for  Service 

The  aim  of  every  normal  man  and  woman  is  an  old  age 
free  from  care  and  want.  To  that  end  most  of  them  toil  pa- 
tiently and  live  closely,  seeking  to  save  something  against  the 
da>-  when  they  can  cam  no  more.  And  yet  the  same  fate 
awaits  the  overwhelming  mass  of  them.  In  the  life  of  the 
toiler  there  are  weeks,  and  sometimes  months,  of  enforced 
idleness,  weeks  of  unavoidable  illness,  losses  from  cheating  and 
swindling,  and  then,  as  age  creeps  on,  from  about  his  forty- 
fifth  year,  a  constantly  declining  capacity  to  earn,  until  at 
fifty-five  or  sixty  he  finds  himself  helpless  and  destitute.  There 
is  hardly  a  more  pitiful  tragedy  than  the  lot  of  the  toiler  who 
has  struggled  all  his  life  to  gain  a  competence  and  who  at 
sixty  years  faces  the  poorhouse.  Th'j  black  slave  had  no 
such  tragedy  as  this.  It  is  a  tragedy  reserved  for  the  free 
worker  m  "the  freest  nation  on  the  globe."  * 

Since  this  chapter  was  first  written,  attention  hab 
been  called  to  the  above  resumg  in  a  speech  delivered 
before  the  House  of  Representatives  at  Washington, 
which  is  an  indication  that  it  is  apparent  to  all  who 
weigh  the  facts  relating  to  the  condition  of  the  eighteen 
millions  of  wage-earners  in  the  United  States,  that 

>  Congressman  Victor  L.  Berger,  Congressional  Record,  Vol.  47, 
No.  101,  page  3913. 

a9S 


296    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

one  of  tl-.e  grealest  economic  problems  confronting  the 
nation  is  that  of  Old  Age  Dependency. 

The  proper  solution  of  this  problem  requires  eco- 
noniic  skil'  of  the  highest  grade  and  legislative  courage 
and  ability  of  the  most  patriotic  kind.   With  prob- 
ably three-fourths  of  all  adult  males,  and  nineteen- 
twentieths  of  all  adult  females,  in  our  great  industrial 
army  of  eighteen  millions  of  human  beings,  receiving 
in  wages  barely  enough  to  provide  food,  shelter  and 
clothing  of  the  poorest  sort;  with  scarcely  one  wage- 
earner  in  ten  able  to  lay  by  in  savings  for  the  rainy 
day  of  invalidity  or  old  age ;  with  the  ahnshouses  and 
benevolent  homes  crowded  with  the  cast-off,  indigent, 
aged  and  worn-out  members  of  our  industrial  mecha- 
nism ;  witli  communal  and  private  charity  already  taxed 
beyond  reason  for  transient  relief  of  the  poverty- 
stricken  ;  with  the  efforts  at  relief  through  industrial 
corporations  and  mutual  societies  making  only  partial, 
inadequate  and  ofttimes  unstable  provision  for  a  very 
small  proportion  of  the  needy ;  with  the  state  recog- 
nizing the  old  age  demands  of  only  a  few  of  the  serv- 
ants of  the  body  poUtic;  with  the  multiform  and 
varied  opportunities  of  purchasing  indemnity  against 
old  age  want  within  the  financial  reach  of  a  meager 
paucity  of  our  working  population ;  with  the  evidences 
of  growing  discontent  over  present  conditions,  fear 
and  dread  of  the  future  and  malice  against  the  present 


PENSIONS  FOR  SERVICE 


297 


industrial  order  of  things,  ominous  and  convincing,  — 
the  problem  is  weighted  with  potentiaUties  for  weal  or 
woe  that  make  its  solution  a  difficult,  dangerous  but 
none  the  less  imperious  task. 

It  is  the  same  problem  in  the  presence  of  which  the 
statesmanship  of  Europe  has  been  standing  with  un- 
covered, bowed  head  during  the  past  half  century,  — 
that  demanded  the  greatest  constructive  legislative 
ability  of  a  Bismarck ;  the  foresight  and  tact  of  a  Glad- 
stone;   the  most  serious  thouglit  and  considerate 
atte  ntion  of  British  Parliaments  under  the  leadership 
of  a  Morley,  a  Chamberlain,  an  Asquith  and  a  Lloyd- 
George  ;  a  problem  which  has  forced  itself  into  gov- 
ernment councils  and  legislative  assemblies  with  de- 
mands for  immediate  solution  in  Belgium,  France, 
Austria,  Denmark,  SwiUeriand  and  Italy,  as  well  as 
Germany  and  Great  Britain,  in  Europe;  and  has  re- 
ceived the  most  courteous  attention  and  careful  treat- 
ment in  New  Zealand  and  Australia.  The  attempts 
at  the  solution  of  this  problem  abroad  may  be  ir^T- 
esting  and  helpful  to  those  who  realize  its  importance 
here;  therefore,  a  brief  description  of  the  various 
plans  of  old-age  and  invaUdity  pension  laws  adopted 
in  foreign  countries  is  presented. 

As  Germany  led  in  this  movement  and  the  law 
enacted  in  that  country  in  1889  has  been  largely  a 
model  and  inspiration  for  other  countries,  the  sum- 


|l 


V-  E 


298    OLD  AGE  DEPENDENCY  IN  TBE  UNITED  STATES 


mary  of  the  German  law,  as  received  through  the 
courtesy  of  Consul-General  Robert  P.  Skinner  of 
Hamburg,  under  date  of  August  28,  191 1,  is  given  in 
full,  as  follows :  — 

Old  age  and  invalidity  insurance  is  compulsory  in  Ger- 
many when  the  annual  income  of  the  insured  does  not  emed 
$476. 

This  form  of  insurance  is  applicable  to  all  laborers,  to  em- 
ployees in  commercial  establishments,  to  domestic  servants 
and  to  other  employees  of  all  kinds,  including  the  crews  of 
mercantile  ships.  The  underwriters  of  this  class  of  insurance 
are  private  and  state  insurance  establishments. 

Old  age  and  invalidity  insurance  legislation  differs  from 
accident  legislation  in  that  the  cost  thereof  is  shared  between 
employer  and  employed.  The  imperial  government,  more- 
over, contributes  to  each  pension  the  sum  of  $11.90  from  its 
own  funds,  and  also  pays  a  portion  of  the  premiums  while  the 
insured  are  performing  military  duties,  as  well  as  a  share  of  the 
cost  of  administration. 

The  weekly  premiums  are  uniform  for  all  classes  of  insured 
and  are  fixed  as  follows,  according  to  the  amount  of  wages 
received :  — 


Class 

Annum.  Incoue 

WeXKlM  CONTM- 
BUnON 

I 

Up  to 

350  mks.  ($  83.30) 

I'f.  14  ($0.03,3) 

II 

From 

3S0  to 

550  mks.  ($  83.30  to  $130.90) 

Pf.  20  ($0,048) 

m 

From 

SSO  to 

850  mks.  ($130-90  to  $202.30) 

Pf.  24  ($o.os7) 

IV 

From 

8so  to  itso  mks.  ($202.30  to  $273.70) 

Pf.  30  ($0,071) 

V 

From  1150 

mks.  ($273-7°) 

Pf.  36  ($0,086) 

The  contributions  are  paid  by  post,  and  special  stamps  or 
cards,  on  sale  at  all  post  offices,  are  provided  for  such  purposes. 


PENSIONS  FOR  SERVICE 


299 


Every  insured  must  be  in  possession  of  a  card,  and  non-com- 
pliance with  regulations  and  forgeries  are  punishable. 

The  annuities,  provided  by  the  payment  of  these  premiums, 
are  due  to  all  persons  who  have  become  permanently  invalid 
and  unable  to  support  themselves  after  more  than  twenty-six 
weeks  of  sickness  and  who,  for  this  reason,  cannot  claim  in- 
demnification under  the  provisions  of  the  insurance  law  against 
sickness.  Annuities  for  old  age  are  payable  to  the  insured 
when  they  reach  their  seventieth  year.  The  annuities  are 
payable  only  if  not  less  than  one  hundred  premiums  have 
been  contributed,  and  they  aie  based  upon  the  wage  class  of 
the  insured  and  the  number  of  premiums  paid. 

In  addition  to  the  $11.90,  paid  by  the  imperial  government, 
the  insured  receives  annually  an  original  donation  of  from 
$14.28  to  $23.80,  according  to  his  wage  class,  t  j  which  is  added 
$0,007,  $0,014,  $0,019,  $0,024  or  $0,029,  according  to  the  num- 
ber of  weeks  during  which  premiums  have  been  paid.  Ac- 
cordingly the  minimum  in\alid  pension,  properly  speaking 
(and  payable  in  addition  to  the  above)  amounts  to  from  S27.60 
to  $35.70  annually,  according  to  the  wage  class,  and  the  maxi- 
mum pension  from  $44.03  to  $107.10,  the  latter  rates  applicable 
after  the  insured  is  over  fifty  years  of  age.  The  old  age  pension 
amounts  to  from  $26.18  to  $54.74  according  to  the  wage  scale. 

Pensions  are  paid  monthly  by  post,  in  advance.  When  no 
pension  is  granted,  one-half  of  the  amount  paid  in  premiums 
is  returned  to  the  insured,  provided  at  least  $47.60  have  been 
so  paid. 

By  statute,  surplus  funds  of  the  insurance  establishment 
can  be  utilized,  with  the  approval  of  the  Bundcsral,  in  the 
■"nterest  of  the  insured  classes.  In  such  manner,  there  had 
been  used  for  public  benefit,  toward  the  end  of  the  year  1904, 
over  36  per  cent  of  the  funds  of  such  insurance  establishments, 
amoun^ins  to  approximatply  $00,484,000.  of  which  $3I,773jWO 
had  hxa  invested  in  workingmen's  dwelling  houses. 


30O   OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

During  ihs'  year  1906,  the  receipts  of  these  insurance  estab- 
lishments amounted  to  almost  Mks.  180,000,000  ($43,840,000) 

and  the  following  payments  were  made:  — 
I  -.Qoo  invalid  [)cnsions       (average  Mks.  162. 88)  ($38.77) 
ii,6oo  sickness  pensions     (average  Mks.  163.^9)  (S38.86) 
10,700  old  age  pensions      (average  Mks.  160.80)  ($38.37) 
The  total  amount  of  nensions  paid  was  about  Mks.  94,000,000 
($22,372,000) ;  the  sum  contributed  in  addition  thereto,  by  the 
imperial  government,  was  Mks.  49,000,000  ($11,662,000). 

While  the  German  system  has  been  severely  criti- 
cized on  the  ground  that  Bismarck  devised  it  merely  as 
a  sop  to  the  Social-Democrats  and  that  it  "provides 
not  enough  to  live  on  and  a  little  too  much  to  die  on," 
still  Germany  is  entitled  to  great  praise  for  early 
leadership  among  the  great  nations  in  attempting  the 
solution  of  the  old  age  dependency  problem. 

Denmark  enacted  a  law  in  1891  which  makes  it 
possible  for  all  citizens,  on  reaching  their  sixtieth  year 
of  age,  to  receive  from  the  communal  authorities  pen- 
sions in  amounts  which  are  left  indeterminate,  but 
which  shall  be  sufficient,  in  addition  to  whatever  in- 
come the  pensioner  may  have,  to  provide  him  the 
necessities  of  life,  without  seeking  poor  relief.  Those 
who  took  advantage  of  the  law  ahnost  immediately 
numbered  43,826  (January  i,  1893);  and  their 
number  had  increased  to  66,878  by  January  i,  1905, 
while  the  amount  of  relief  granted  under  the  law  in- 
creased from  Kr.  2,557,961  ($654,582)  in  1892,  to 


PENSIONS  FOR  SERVICE 


3« 


Kr.  7,193,494  ($1,840,916)  Januar>-  i,  1905.  The 
average  pension  paid  under  this  law  in  the  year 
1905-1906  was  about  forty-one  dollars  per  year,  and 
the  pensioners  equaled  about  one-eighth  of  the  total 
wage-earning  population. 

In  1900,  Belgium  enacted  a  law  known  as  "La  Loi 
sur  les  Pensions  de  Vieillesse,"  which  has  two  objects 
in  view,  namely:  (1)  to  encourage  the  working  classes 
to  save  and  to  assist  them  by  state  contriI)uti(ins.  by 
constituting  a  fund  which  will  secure  to  tliem  at  tlie 
age  of  sixty-five  an  annuity  not  exceeding  three  hun- 
dred and  sixty  francs  per  person;  (2)  to  grant  work- 
ing men  and  women,  or  former  working  men  and 
women,  special  grants  of  sixty-five  francs  per  annum 
when  they  are  in  want,  -  these  grants  being  on  the 
ni)n-contributory  plan.  In  1907  the  number  of  pen- 
sioners was  about  210,000;  and  the  state  was  dis- 
bursing among  them  an  annual  sum  of  about  1 5,000,000 
francs  ($3,000,000).  The  growth  of  this  government 
scheme  in  Belgium  is  well  illustrated  from  the  reports, 
showing  that  in  1900  there  were  18,567  deposits  and 
the  amoxmt  of  deposits  that  year  was  916,211.04 
francs;  and  in  i9''6  the  number  of  deposits  was 
2,224,727,  while  the  amount  of  deposits  was  13,706,- 
894.47  francs. 

While  the  vaiious  nations  of  Europe  were  thus  wres- 
tling with  the  problem,  the  British  colonies  were  giv- 


303    OLD  AOE  DI^ENDKNcY  IN  THE  UNITED  STATES 

ing  the  matter  most  earnest  attention,  with  the  result 
that  New  Zealand  enacted  an  old  age  pension  law  in 
1898,  which  provides  for  a  pendon  to  each  person  who 
has  resided  in  the  colony  for  twenty-five  years  and 
has  reached  the  age  of  sixty-five,  except  Chinese  or 
other  Asiatics,  citizens  who  have  not  been  natural- 
ized longer  than  one  year,  aliens,  and  certain  govern- 
ment employees  who  are  provided  for  by  "Ci\  il  List 
Act  of  1863."  The  pension  provided  was  C18  per 
annum,  or  6^.  iid.  per  week,  which  was,  however, 
increased  in  1905  to  £26  per  annum,  or  105.  a  week; 
provided  that  the  applicant  for  pension  has  lived  a 
sober  and  reputable  life  during  the  five  years  preced- 
ing his  application,  and  that  his  income  shall  not  exceed 
£50  i)er  annum,  nor  must  the  value  of  his  acciunu- 
lated  property  exceed  £260.  Severe  penalties  are 
imposed  upon  those  who  deprive  themselves  of  prop- 
erty or  income  to  qualify  as  pensioners.  The  reports 
go  to  show  that  in  1906  thirty-four  per  cent  of  all 
those  eligible  in  the  colony  by  age  and  residence  were 
receiving  pensions.* 
New  South  Wales  followed  the  lead  of  New  Zealand 

>  The  New  Zealand  Ofl&cial  Year  Book  for  1910  (page  742)  reports 
the  total  number  of  pensioners  for  the  fiscal  year  ending  March  31, 
as  i  S-.^20  and  the  total  amount  paid  to  them  for  th.-  year  as  £\62,4q6 
($1,812,480).  The  total  amount  paid  pensioners  under  the  operation 
of  this  law  from  March  31, 1899,  to  March  31,  1910,  is  £2,767,011 
(S13.83S.0SS)- 


PENSIONS  FOR  SERVICE 


by  estal)lis?Mng  a  government  pension  system  in  1901, 
which  provides  the  same  amount  of  pension,  viz., 
£26  to  those  whose  income  is  less  than  C52  per  an- 
num; which,  however,  (iiffers  somewhat  from  the 
New  Zealand  system,  in  that  the  pension  of  £26  a 
year  is  diminished  by  £1  for  every  £1  of  income  above 
£26,  and  l)y  £1  for  every  £15  of  property  which  the 
pensioner  possesses.  It  also  diflers  in  the  age  limit, 
in  that  any  person  over  sixty  years  of  age,  incapaci- 
tated by  sickness  or  injury,  may  receive  a  pension  if 
ocherwise  qualified.  All  citizens  of  the  colony  who 
reach  the  age  of  sixty-five  years,  and  whose  income  and 
property  do  not  exceed  the  simulated  amount,  are 
entitled  to  old  age  pensions. 

Victoria  followed  speedily,  with  a  law  which  is  a 
modification  of  the  pension  system  in  her  sister  colo- 
nies. The  applicant  for  pension  must  show  that  for 
SIX  months  immediately  preceding  his  application  his 
income  did  not  exceed  eight  shillings  a  week  and  that 
he  made  reasonable  efforts  to  provide  for  himself; 
nor  can  he  receive  a  pension  after  having  reached  the 
age  of  sixty-five  if  he  appears  to  be  physically  capable 
of  earning  his  own  living.  These  restrictions  in  Vic- 
toria seem  to  have  operated  to  reduce  the  number  of 
pensioners  and  likewise  the  disbursements  on  accotmt 
of  pensions.  The  Victoria  Year  Book  for  1905  *  shows 

•  Page  270. 


304    OLL  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

that  the  estimated  number  of  persons  in  the  colony, 
sixty-five  years  old  and  upwards,  was  68,760,  of  whom 
1 1 ,05s  were  receiving  pensions,  amounting  to  £  1 97 ,000. 

The  number  of  pension  ?rs,  therefore,  was  16  per  cent 
of  the  total  cligibles;  whereas  in  New  South  Wales 
the  number  of  pensioners  for  the  same  year  was  38  per 
cent  of  ihe  eligibles. 

This  example  set  the  motherland  by  some  of  her 
colonies  seems  to  have  been  followed  in  England  after 
a  century  or  more  of  agitation,  during  wliich  period 
very  many  schemes  were  proposed  by  parliamentary 
committees  and  publicists.  The  following  descrip- 
tion of  the  British  scheme,  as  it  was  finally  enacted  into 
law  in  1908,  is  given  by  Mr.  Dawson  and  Dr.  Frankel 
in  "Workingmen's  Insurance  in  Europe" : 

The  scheme  is  non-contributory.  It  provides  that  all  over 
seventy  years  of  age,  who  have  been  British  subjects  for  at 
least  twenty  years,  have  not  received  poor  relief,  and  have 
done  what  they  could  to  support  their  families,  are  entitled  to 
pensions.  Persons  who  have  been  in  prison  during  the  pre- 
cedmg  ten  years  arc  not  eligible;  nor  are  those  whose  annual 
incomes  exceed  £51  loj.  ($153.41).  Should  any  person  de- 
prive himself  of  income  or  property  in  oider  to  qualify,  the 
income  or  property  so  disp(»ed  of  shall  be  taken  as  still  his 
own.  Fraud  of  any  kind  is  punishable  with  severe  penalties, 
and  few  It^opholes  are  left. 

Pensions  are  paid  out  of  funds  raised  by  general  taxation, 
no  contributions  on  the  part  of  workingmen  being  required. 


•Pages  314-315- 


PENSIONS  rOK  8EKV1 


Sums  received  vary  with  the  income  of  the  pensioner,  the 
aggregate  of  his  income  and  his  jK-nsion  not  to  exceed  13  •hil- 
lings ($3.1  a)  a  week.  The  fdtowiitg  teble  Qliutrates  ar:  lunU 
allowed  under  the  various  conditions  :  — 


Wrra  Ahncai.  Incou 

Wkuv  Pmnw 

(SbaiiDd) 

5 

4 

•J 

2 

I 

No  pension  allowed 

The  ni-.hod  of  administration  is  of  interest.  The  central 
authority  is  the  local  government  board,  all  pension  officers 
being  appointed  by  the  treasury.  A  local  pension  committee, 
however,  is  appointed  by  the  council  of  the  district  or  county 
for  every  boroiif;h  and  urbn-  di:,»rict.  ("laims  are  adjudicated 
by  the  local  pension  committee  and  appointed  pension  officers ; 
but  there  is  a  right  of  appeal  to  the  central  authority.  Pensions 
are  paid  weekly  in  advance  and  are  inalienable  and  non-assign- 
al)le,  exempt  from  being  taken  in  banicruptry  or  under  execu- 
tion. It  was  estimated  that  572,000  persons  would  be  in 
receipt  of  state  pensions  in  the  financial  year  1908-1909,  and 
that  the  cost  for  the  year  would  be  £7,500,000  {$36,52 S,<ioo). 

This  British  law  was  hardly  afforded  time  for  a 
practical  working  before  the  agitation  arose  over  the 
general  compvdsory  insurance  scheme  proposed  by 
Lloyd-George,  which  has  occupied  the  attention  of 
Parliament  and  the  nation  generally  almost  to  the 


306    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

exclusion  of  other  legislative  matters  during  the  year 
191 1.   In  his  speech  introducing  this  bill  in  the  House 
of  Commons,  May  4,  iQH,  Mr.  Lloyd-George  gave 
utterance  to  the  following  sentiment:  "Here  we  are 
in  the  year  of  the  crowning  of  the  King.    We  have  got 
men  from  all  parts  of  this  great  Empire  coming,  not 
merely  to  celebrate  the  present  splendor  of  the  Empire, 
but  also  to  take  counsel  together  as  to  the  best  means 
of  promoting  its  ^  iture  welfare.    I  think  that  now 
would  be  a  very  opportune  moment  for  us  in  the  home 
land  to  carr\-  through  a  measure  that  will  relieve  vintold 
misery  in  myriads  of  homes,  —  misery  that  is  unde- 
served; that  will  help  to  prevent  a  good  deal  of 
wretchedness  and  which  will  arm  the  nation  to  fight 
until  it  conquers  the  'pestilence  that  walketh  in  dark- 
ness and  the  destruction  that  wasteth  at  noonday.'" 
Among  the  European  nations,  France  is  the  latest 
to  adopt  a  compulsory  insurance  system  for  all  work- 
ing people,  with  a  hbcral  subvention  by  the  state. 
The  law  was  passed  April  5,  1910,  and  became 
effective  July  i,  1911,  and  is  obligatory  upon  all  people 
of  both  sexes  who  receive  wages  less  than  3000  francs 
($600)  per  year,  employed  in  any  branch  of  indus- 
:ry,  commerce,  liberal  professions,  agriculture,  serv- 
ants for  wages,  etc. ;  except  that  persons  in  the  civil 
or  mihtary  service,  miners,  seamen,  etc.,  who  are  al- 
ready pro\ided  for  by  prior  laws,  are  not  obliged  to 


PENSIONS  FOR  SERVICE 


come  under  the  new  law.  There  is  also  provision  that 
persons  receiving  over  3000  francs,  but  not  exceeding 
5000,  as  an  annual  income,  may  voluntarily  come  under 
the  provisions  of  the  law  by  complying  with  certain 
strict  conditions.  Provision  is  also  made  for  citizens 
above  the  age  of  forty-five  years  at  the  time  the  law 
takes  effect,  but  who  are  not  able  to  comply  with  the 
requirements  of  the  law,  with  reference  \->  terms  of 
service  and  amounts  of  contribution  to  the  pension 
fund.  The  law  provides  that  any  person  who  has 
contributed  to  the  fund  for  thirty  years,  and  has 
reached  the  age  of  sixty-five,  shall  receive  a  pension, 
and  that  the  portion  of  the  pension  fund,  created  by  the 
contributions  of  the  individual,  may  be  drawn  upon 
by  him  after  he  has  reached  the  age  of  fifty-five,  if  he  is 
then  in  necessitous  circumstances,  and  has  made  con- 
tributions for  fifteen  years.  In  case,  however,  his 
portion  of  the  pension  fund  is  thus  liquidated,  the  sub- 
vention of  the  state  is  reduced  proportionately.  The 
minimum  total  contributions  provided  are  based  upon 
total  wages  earned,  according  to  the  following  scale :  — 


EMnonn 

Total  Wage 

Total 
Contribu- 
tions 

euployers' 

Contribu- 
tions 



State  Anni.al 
CoNTRimnoN 
AT  Age  bs 

Men  

gfr. 

3  c- 

3  c. 

60  fr. 

Women  .... 

6fr. 

2  c. 

a  c. 

60  fr. 

Minors  under  18  . 

4  fr.  so  c. 

1  c.  s  m. 

I  c.  s  m. 

60  fr. 

308    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

Employees  may  contribute  a  larger  sum  than  desig- 
nated in  the  above  scale,  in  order  to  provide  by  their 
own  foresight  a  larger  annuity  on  reaching  the  pension 
or  settlement  period ;  in  such  case,  however,  the  con- 
tributions of  the  employer  are  not  necessarily  increased, 
and,  in  no  event,  will  the  state  make  a  larger  subven- 
tion than  indicated  in  the  above  schedule.  It  is  also 
pro\ided  that,  if  contributions  have  been  made  for  less 
than  thirty  years,  the  state  grant  will  be  reduced  by 
one  franc  fifty  centimes  for  each  year  less  than  thirty. 
There  arc  liberal  provisions  in  the  law  whereby  the 
equities  of  indi^■iduals  may  be  preserved ;  as,  for 
instance,  a  workingman  may  be  for  a  part  of  the  tliirty 
years  or  more  an  employer  himself,  and  a  part  of  the 
time  an  employee.  The  regulations  are  so  broad  that 
all  questions  will  be  adjudicated  by  proper  tribunals, 
which  the  law  duly  establishes.  At  sixty-five,  on  the 
lowest  scale  of  contributions,  a  pensioner  may  receive, 
imless  withdrawals  have  been  made  beforehand :  male, 
414  francs  ($82.80);  and  female,  270  francs  ($54)  per 
annum.  This  includes  the  state  contribution.  It 
must  be  remembered,  however,  as  above  stated,  that 
working  people  are  not  limited  to  the  minimum  con- 
tributions required  under  the  law,  and.  therefore,  may 
make  their  pensions  whatever  amount  their  own  thrift 
and  foresight  may  have  made  possible. 

It  has  been  estimated  liiaL  the  total  auiouni  required 


PENSIONS  FOR  SERVICE 


for  the  meeting  of  the  obligations  of  the  state  imder 
this  law  during  the  first  year  of  its  operation  will  be 
something  like  $36,000,000 ;  but  that  after  the  gratui- 
ties made  by  the  government  for  people  in  the  transi- 
tory period,  that  is,  who  because  of  age  cannot  con- 
tribute for  thirty  years,  are  no  longer  necessary,  the 
normal  expenditures  of  the  state,  in  the  operation  of 
the  law,  will  not  exceed  $25,000,000  per  annum. 
According  to  the  French  census  reports,  the  total 
number  of  working  people  who  are  compulsorily 
brought  undp"  tliis  law  is  about  twelve  miUions; 
while  six  millions  more  ma\'  voluntarily  take  advan- 
tage of  it.  Thus  the  benefits  of  the  law  are  available 
to  eighteen  millions  of  the  people  of  France,  —  twelve 
millions  whose  incomes  are  less  than  six  himdred 
dollars  per  year,  and  six  millions  whose  incomes  are 
between  six  hundred  dollars  and  one  thousand  dollars 
per  year. 

From  the  above  analysis  of  the  old  age  pension  laws 
established  in  other  countries,  there  may  be  drawn 
suggestions  and  plans  that  will  be  of  material  aid  to 
the  economist  and  legislator  in  the  solution  of  the 

problem  in  this  country.  The  schemes  now  estab- 
lished abroad  comprise  practically  all  those  yet  de- 
vised for  the  prevention  of  old  age  dependency  among 
working  people :  pensions  purchased  by  voluntary 
contributions;    pensions  purchased   by  voluntary 


3IO    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

contributions  with  state  subvention;  pensions  pur- 
chased by  compulsory  contributions  of  employees  and 
employers,  with  state  subvention ;  and  pensions  granted 
by  the  state  to  the  old  and  needy,  without  any  con- 
tributions on  their  behalf  whatsoever.  Each  of  .hese 
schemes  has  its  advocates,  who  are  cleverly  aggressive 
and  enthusiastic,  according  to  bent  or  bias.  It  is 
not  necessary  to  recount  the  arguments  put  forth  on 
behalf  of  these  various  schemes.  Those  for  each  could 
hardly  be  summed  up  in  volumes. 

"Which  scheme  shall  America  choose  ? "  is  the  ques- 
tion which  at  the  outset  even  labor  itself  found  diffi- 
cult to  answer.    At  the  convention  of  the  American 
Federation  of  Labor  in  Denver,  1908,  the  following 
resolution  was  adopted:    "We  would,  therefor, 
recommend  that  the  Executive  Council  be  authorized 
to  secure  the  assistance  of  such  competent  legal  advice 
as  will  enable  them  to  prepare  the  draft  of  a  bill  pro- 
viding for  old  age  pensions,  and  that  such  bill  be  in- 
troduced either  in  the  legislatures  of  the  states  or  in 
Congress, — their  action  in  this  being  governed  by  their 
decision  as  to  whether  this  legislation  is  to  be  most 
readily  secured  and  applied  through  the  individual 
action  of  the  several  states,  or  by  federal  legislation, 
or  by  both." 

At  the  convention  of  the  same  organization  at  To- 
ronto, Canada,  in  1909,  in  accordance  with  the  Denver 


PENSIONS  FOR  SERVICE  311 

resolution,  the  executive  committee  recommended  the 
approval  of  the  bill  drawn  by  Congressman  W.  B. 
Wilson  for  the  establishment  of  a  national  pension 
system  through  the  organization  of  the  Old  Age 
Home  Guard  of  the  United  States  Army.  As  the 
convention  approved  this  bill  and  thus  pledged  to  it 
the  support  of  the  great  body  of  organized  labor  in 
America,  the  text  of  the  bill  is  given  in  full  as  Ap- 
pendix B. 

The  principle  underlying  this  bill  is  service  —  merely 
service,  -  which  Professor  Henderson  recognizes  in 
this  language:*  "The  nation  and  the  states  have  al- 
ready declared  it  to  be  our  duty  to  shelter  the  aged  and 
wounded  soldier ;  why  should  the  victims  of  the  'army 
of  labor'  be  neglected  ?  They,  also,  have  served  their 
country  in  occupations  even  more  dangerous  and  de- 
structive than  war  and  quite  as  useful." 

Actuaries  tell  us  that  out  of  one  thousand  men  liv- 
ing at  the  age  of  twenty,  five  hundred  will  still  be 
living  at  the  age  of  sixty-five.  Economists  and 
statisticians  te'I  us  that  of  the  five  hundred  living  at 
the  age  of  sixty-five,  two  himdred  will  be  in  want  and 
that  eight-ninths  of  all  the  pauperism  in  the  country  is 
among  people  who  have  passed  the  age  of  sixty-five. 
Shall  we  continue  to  turn  So  "i  over  to  the  alms- 

'  C.  R.  Hendoxm,  "Industrial  Insurance  in  the  United  States," 
page  308. 


312    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

houses  ?   Or  leave  them  to  the  vicissitudes  of  public 
or  private  charity  ? 

Fortunately  or  unfortunately,  according  to  the 
standpoint  of  religion  and  economics  from  which  one 
views  the  matter,  we  Americans  have  not  that  con- 
ception of  the  family,  as  the  unit  of  society,  and  that 
reverence  for  old  age,  which  is  ingrafted  upon  the  heart 
of  the  Oriental  in  all  his  religious  and  economic 
training.   In  China  and  Japan  it  is  rare  to  find  an 
individual  in  want  above  sixty  years  of  age,  who  has 
not  some  relative,  no  matter  how  remote,  whose  ethics 
and  religion  command  liim  to  make  a  place  in  his  home 
for  the  indigent  one,  and  provide  for  him  as  if  he  were  a 
member  of  his  own  immediate  family.  Almshouses, 
private  indoor  or  outdoor  relief,  for  the  old,  arc  hardly 
known  in  those  Oriental  lands,  where  high  ethical  re- 
gard for  the  aged  is  instilled  into  the  indi\'idual  com- 
mon mind  from  infancy.   Unfortunately,  however,  in 
this  country,  no  such  esteem  for  the  aged  one  prevails, 
except  among  his  near  relatives  and  expecially  in 
agricultural  communities.   In  our  manufacturing  cen- 
ters especially,  the  helpless,  destitute  grandfather  or 
grandmother  is  regarded  as  a  distinct  burden  to  the 
household,  the  carrying  of  which  oftentimes  forces 
children  out  of  school  and  into  the  streets,  factories,  or 
shops,  in  order  to  provide  for  the  added  increment  to 
the  household  expenses  which  the  taking  on  of  an 


PENSIONS  FOR  SERVICE 


aged  relative,  no  matter  how  near  he  may  be  to  the 
immediate  family,  entails. 

Our  hearts  assent  to  the  old  man's  plea  that  a  part 
of  the  wealth  of  the  world  which  liis  life  and  toil  have 
helped  to  create  is  his  by  right  and  should  not  be 
denied  or  withheld  from  him.    This  sentiment  is 
stated  in  " Workingmen's  Insurance  in  Europe,"'  in 
the  following  forceful  language:  '-Provision  for  old 
age  ...  is  based  upon  siTvices  rendered  in  the  past 
and  upon  contributions  of  the  most  \  aried  character 
to  all  forms  of  social  and  community  prosperity.  In 
other  words,  a  benefit  of  this  character  which,  under 
the  voluntary  insurance  system  at  least  can  only  be 
supplied  by  means  of  the  accumulations  of  funds 
through  long  periods,  should  not  be  subject  to  defeat 
by  any  contingency  whatever,  except  criminal  conduct 
or  pauperization,  but  should  be  secured  by  the  mere 
fact  of  survival.    The  idea  is  that  tne  pension  is  a 
deferred  and  contingent  additional  compensation  for 
past  services,  like  the  service  pensions  granted  by 
employers." 

The  preamble  to  the  New  Zealand  Pension  Act  of 
1898  states  this principl  thus:=  "It  is  equitable  that 
deserving  persons  who.  uuring  the  prime  of  life,  have 
helped  to  bear  the  public  burdens  of  the  colony  by 
the  payment  of  taxes  and  to  open  up  its  resources  by 

«  Page  302.       '  W.  Sutherland,  "  Old  Age  Pensions,"  page  99. 


314    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

their  labor  and  skill  should  receive  from  the  colony 
a  pension  in  their  old  age."  The  law  of  Victoria 
asserts  the  principle  in  even  stronger  language : 
"It  is  the  duty  of  the  state  to  make  provision  for  its 
helpless  and  aged  poor." 

The  opposition  to  any  such  universal  scheme  is 
diverse,  according  lo  the  interest  and  standpoint  of 
the  opponent ;  not  a  little  of  it  coming  from  the  expo- 
nents of  commercial  life  insurance  companies,  who 
look  with  disapproval  ipon  any  plan  that  may  affect 
directly  or  indirectly  their  companies'  exchequer, 
whose  arguments  may  be  summed  up  in  the  old 
Ephesian  phrase,  "Sirs,  ye  know  that  by  this  craft  we 
have  our  wealth."  Others  object  on  the  groimd  that 
such  a  system  is  contrary  to  our  economic  and  social 
establishment;  as,  for  instance,  the  Massachusetts 
Old  Age  Pension  Commission,*  —  "A  non-contrib- 
utory pension  system  is  simply  a  coimsel  of  despair. 
If  such  a  scheme  be  defensible  or  excusable  in  this 
country,  then  the  whole  economic  and  social  system 
is  a  failure.  The  adoption  of  such  a  policy  would  be 
a  confession  of  its  breakdown."  To  this  utterance. 
Professor  Seager  makes  this  reply  :^  "One  can  only 
regret  that  the  members  of  this  Commission  did  not 
visit  progressive  and  prosperous  New  Zealand  and 

■  Report  of  Commission  on  Old  Age  Pensions,  Annuities  and  In- 

*  "Social  Insurance," page  144. 


PENSIONS  FOR  SERVICE 


3IS 


Australia  before  they  committed  th<  msclves  to  such 
extreme  views.  Such  opinions  in  tliose  countries, 
whose  'economic  and  social  system'  is  fundamentally 
like  our  own,  would  excite  only  amused  surprise." 

Others  maintain  that  it  would  he  unjust  and 
inequitable  to  tax  the  well-to-do  and  ihrifty  portion 
of  the  community  for  the  benefit  and  su[)port  of  the 
slothful  and  improvident.  To  this  the  reply  is  ready 
and  unanswerable :  The  present  system  of  poor  relief, 
public  and  private,  is  maintained  by  taxes,  both  volun- 
tary and  obligatory,  upon  the  well-to-do  and  thrifty 
portion  of  the  population ;  and,  further,  that  the  well- 
to-do  and  thrifty  taxpayer  at  thirty  may  be  a  so- 
called  improvident  dependent  at  sixty-five  or  seventy. 
Moreover,  as  Mr.  Lloyd-George  zo  forcefully  said  in 
urging  his  old-age  pension  bill  before  the  House  of 
Commons:  "As  long  as  you  have  taxes  upon  com- 
modities which  are  consumed  practically  by  every 
family  in  the  country',  there  is  no  such  thing  as  a 
non-contributory  scheme.  If  you  tax  tea  and  coffee 
and  partly  sugar,  beer,  and  tobacco,  you  hit  everybody 
one  way  or  another.  Indeed,  when  a  scheme 
is  fmanced  from  public  funds,  it  is  just  as  much  a 
contributory  scheme  as  one  financea  directly  from 
means  of  contributions  arranged  on  the  German  or 
any  other  basis." 

That  the  establishment  of  such  a  scheme  would 


3l6    OLD  AOK  DEPENDENCY  IN  THE  UNITED  STATES 

have  a  direful  effect  on  thrift  and  the  present  Ameri- 
can spirit  of  independence,  is  an  objection  of  little 
moment,  in  view  of  the  well-observed  and  oft-experi- 
enced effect  of  a  certain  definite  provision  for  the 
future,  supplanting  anxiety,  suspense  and  dread  with 
contentment,  vigor  and  hop(  This  principle  is  well 
illustrated  in  the  results  of  the  bonus  system  on  a 
certain  large  railroad  in  America,  concerning  which 
Mr.  Harrington  Emerson,  in  a  lecture  at  Harvard 
University,  November  i6,  1910,  gives  the  following 
testimony:  "Through  the  application  of  the  various 
principles,  including  increased  interest  of  the  men, 
average  efficiency  at  the  largest  shop  was  brought  up 
from  60  per  cent  to  100  per  cent ;  and  the  plan  has  been 
found  so  satisfactory,  that  it  has  been  extended  from 
its  small  beginnings,  imtil  now  in  the  fiscal  year 
1909-1910  about  $1,250,000  a  year  was  paid  in  bonus 
and  its  administration  to  the  employees."  Again,  he 
says,  "It  changes  the  men  from  half-hearted,  listless, 
idle,  indifferent  workmen  to  striving,  alert,  active, 
intelligent,  honest,  self-respecting  workers,  who  take 
an  intense  interest  in  the  work  at  hand  and  are  willing 
to  do  whatsoever  their  hands  find  to  do  with  all  their 
might." 

Many  a  man  loses  heart  and  goes  through  the  years 
of  his  Hfe  from  fifty  onward  with  drooping  head  and 
faltering  step,  because  there  is  only  helpless  v/ant  iV3 


PENSIONS  FOK  SERVICE 


the  goal  of  old  age ;  whereas  the  prospect  of  a  pen- 
sion coming  to  him  in  his  old  age,  as  a  deferred  divi- 
dend, which  society  as  now  or^mized,  industrial, 
social  and  political,  owes  him,  would  put  spirit  and 
vigor  into  his  life  and  increase  his  efficiency  many- 
fold. 

In  one  of  our  large  cities,  a  poor  German  leather- 
worker  in  a  tannery  hit  upon  a  method  of  trcatiii'? 
IrutluT,  so  as  to  produce  a  finish  not  then  known  in 
tlie  leather  world.  His  employer  saw  at  once  the 
commercial  advantage  that  such  process,  if  patented, 
would  afford  him.  He  secured  the  patent,  promising 
the  laborer  handsome  dividends  for  the  exclusive  use 
of  it.  "The  street"  says  that  the  laborer  was 
euchred  out  of  his  portion.  However  that  may  be, 
the  employer  grew  rich  and  great  and  strong,  and 
died,  after  a  life  of  social  and  political  prominence, 
a  millionaire.  The  laborer  still  toils  at  the  last  in  a 
little  cellar  shoe  shop.  Do^  the  world  of  industry, 
society,  politics  and  economics  owe  this  poor  old 
man  nothing  in  his  dependent  dotage?  Is  it  just 
that  he  should  continue  to  bend  over  old  shoes,  until 
health  and  strength  utterly  fail  ,  >d  then  that  he 
should  be  hauled  away  to  the  oriiouse,  and,  at 
length,  be  laid  in  a  pauper's  grave  r 

And  yet  again :  Al  out  fifty  years  ago,  two  young 
men  went  into  partnership  for  carrying  on  a  retail 


3l8    OLD  ACE  DEPENDENCY  IN  THE  UNITED  STATES 

mercantile  business.  One  shortly  thereafter  became 
financially  embarrassed,  on  account  of  misfortune,  and 
sold  his  share  to  the  other,  who  was  generous  enough, 
however,  to  continue  him  as  a  superintendent.  The 
business  grew  by  leaps  and  bounds ;  and  the  little 
shop  finally  became  a  great  city  department  store. 
Of  the  original  partners,  the  one  who  obtained  the 
control  is  a  millionaire;  the  other  is  still  a  wage- 
earner  on  a  salary  barely  enough  to  supply  the  neces- 
sities of  life.  Does  not  the  industry,  which  he  helped 
to  found  and  which  he  has  served,  just  as  loyally  and 
as  faithfully  as  his  associate,  owe  him  nothing  in  his 
old  age,  when  declining  strength  makes  it  necessary 
for  him  to  resign  his  position  to  a  younger  man  and 
give  up  the  little  weekly  stipend  he  has  been  depend- 
ing on,  —  is  thete  nothing  for  him  but  charity  ? 

When  once  the  people  of  this  country  gather  up  the 
strands  of  such  history,  as  they  are  appearing  in  the 
shops,  stores  and  factories  every  day,  and  weave  them 
together,  they  will  have  at  hand  a  great  hawser  of  fact 
and  determination,  with  .vnich  they  will  n  ue  this 
old  age  tlependen^y  problem  from  continual  drifting 
down  the  stream  of  our  national  life,  with  no  haven  in 
sight. 

From  an  impartial,  thoroughgoing  study  of  the 
problem  in  all  its  phases,  the  conclusion  is  inevif.ible 
that  the  coimtry  must  provide  a  system  of  service 


PENSIONS  FOR  SERVICE  3x9 

pensions  for  its  old  and  worn-out  citizens.  Voluntary 
provisions  are,  as  industrial  conditio  .a  now  obtaining 
clearly  manifest,  impossible.  The  state  subsidy 
scheme  as  idTcrecl  in  Germany  would  be  well-nigh  im- 
practiruble.  bicause  it  would  be  reKurded  as  un-Ameri- 
can and  unjust  in  the  face  of  present  living'  conditions. 
Contril  utory  schemes  are  at  best  a  relief  for  only  a 
small  portion  of  the  needy.  Manifestly,  corptiration 
pension  schemes  provide  *"or  the  buter  class  of  me- 
chanics and  ■  thcr  well-[)aid  laborers.  They  do  not 
reach  the  great  mass  of  the  conmion  day-laboring 
class  throughout  the  coimtry.  Over  90  per  cent  of 
the  almshouse  population  in  the  United  States  is 
drawn  from  this  class,  for  which  no  provisions  are  in 
existence  or  contemplated  in  this  country,  other  than 
state  gratuity  in  old  age.  Unless  the  nation  p:  v 
vides  for  these  hundreds  of  thousands  of  poor  toiiviA-s, 
there  is  absolutely  nothing  left  for  them  but  old  age 
pauperism,  with  its  attendant  disheartening  relief. 
The  sentiment  of  the  whole  wide  world  in  dealing  with 
this  problem  is  that  "service  pensions"  are  (he  only 
possible  prevention. 

And  the  cost  of  it  all  ?  And  the  means  of  meeting 
that  cost  ?  Many  answers  have  been  offered  to  tlicse 
cjuestions. 

If  the  New  Zealand  pension  system  were  to  be 
bodily  transferred  to  the  United  States  and  admin- 


320    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

istered  here  just  as  it  is  there,  it  would  increase  our 
national  expenditures  by  about  $160,000,000  per 
annum,  —  an  amount  slightly  in  excess  of  the  total 
for  military  pensions  for  the  fiscal  year  ending  June  30, 

1910.  One  must  not  lose  sight  of  the  fact  that  mili- 
tary pensions  in  this  country  are  now  nearly  altogether 
old  age  dependency  relief ;  and,  as  the  survivors  of 
the  Civil  War  are  dying  at  the  rate  of  about  three 
thousand  per  month,  the  disbursements  on  account  of 
military  pensions  are  steadily  decreasing.  Hon. 
J.  L.  Davenport,  Commissioner  of  Pensions,  in  sub- 
mitting his  report  for  the  fiscal  year  ending  June  30, 

1911,  states  that  there  are  529,884  survivors  of  the 
Civil  War,  35,243  having  died  during  the  year.  The 
total  number  of  soldiers  and  sailors  of  all  wars  remain- 
ing on  the  roll  was  570,050 ;  dependents  and  widows, 
321,642;  and  army  nurses,  406.  The  total  amount 
paid  in  pension  allowances  during  the  year  was 
$157,325,160,  a  decrease  of  $3,498,154  over  the  preced- 
ing fiscal  year.  The  net  decrease  of  pensioners  for 
the  year  was  28.985.  It  will  not  be  many  years  before 
the  people  of  the  United  States  could  substitute  worn- 
out  soldiers  of  industry  for  the  soldiers  of  war  in  the 
Pension  Bureau,  without  very  greatly  increasing  the 
national  expenditures  on  account  of  pensions.  The 
nation  has  been  prodigal  in  its  provisions  for  national 
defense;  the  yearly  expenditure  on  account  of  the 


PENSIONS  FOR  SERVICE 


321 


navy  being  about  $131,000,000  and  for  the  army 
about  $95,000,000,  making,  for  these  two  arms  of  the 
national  service,  a  total  of  sometliing  like  a  quarter  of 
a  billion  of  dollars  a  year.  An  equal  amount,  expended 
in  the  care  of  old  age  dependents,  would  bring  the  sun- 
shine of  happiness  and  contentment  into  thousands 
of  hearts  and  homes  that  are  now  darkened  by  want 
and  dependence.  The  effect  of  such  a  policy  on  the 
struggUng,  suffering  millions  of  working  people  would 
be  little  short  of  electric ;  the  worn-out  and  old  would 
cease  to  persist  in  trying  to  keep  step  with  the  march, 
hindering  and  encimibering  the  industrial  army  with 
their  inefficiency  and  weakness;  but  would  ^ve  way 
gladly  to  the  yoimger  men  and  women,  who  are  ever 
crowding  and  oftentimes  wrangling  for  place  in  all 
our  industrial  pursuits ;  in  other  words,  the  economic 
and  dynamic  forces  of  the  nation  would  be  immeasur- 
ably increased,  if  every  workingman  and  every  work- 
ingwoman  could  look  forward  to  a  definite,  fixed, 
lifelong  income  on  reaching  the  age  of  sixty-five. 

What  would  be  more  just  and  appropriate  than 
a  national  income  tax  law,  with  individual  incomes, 
above  a  certain  minimum,  taxed  according  to  a  graded 
scale,  in  such  a  way  as  that  every  employer  would  be 
compelled  to  share  the  profits  of  his  business  with  the 
employee  and  cons'imer,  both  of  which  classes  make 
his  profits  possible,  —  in  such  a  way,  also,  as  that 


32  2    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

enormous  individual  fortunes,  accvunulated  at  the 
price  of  human  suffering  and  life;  at  the  sacrifice 
oftentimes  of  public  welfare  along  hygienic  and 
sanitary  lines ;  at  the  sacrifice  also  sometimes  of  civic 
and  political  righteousness;  —  that  all  such  fortunes 
as  may  be  made  up  largely  of  what  might  be  called  the 
confiscation  of  the  just  earnings  of  the  employee,  may 
be  distributed  by  income  or  inheritance  tax  among 
those  whose  powerlessness  and  necessities  made  the 
accumulations  of  such  fortunes  possible? 

The  establishment  of  old  age  pensions,  through  the 
operation  of  a  national  income  tax  law,  is  much  more 
equitable  and  just  from  the  American  standpoint 
than  was  the  plan  proposed  by  Thomas  Paine,  in 
1795,  which  was  to  be  world-wide,  —  a  plan  for 
ameliorating  the  condition  of  man  by  creating  in  every 
nation  a  national  fund,  to  pay  to  every  person,  when 
arrived  at  the  age  of  twenty-one  years,  the  sum  of 
£15  sterling  to  enable  him  or  her  to  begin  the  world, 
and  also  £10  sterUng  per  annum  during  life,  to  every 
person  then  living  at  the  age  of  fifty  years,  and  to  all 
others  when  they  arrive  at  that  age,  to  enable  them 
to  live  in  old  age  without  wretchedness  and  go  decently 
out  of  the  world.'    Mr.  Paine  proposed  to  finance 
his  plan  by  confiscating  on  the  death  of  every  indi- 
vidual 10  per  cent  of  his  property  as  due  to  society; 
« J.  1  rome  Wilkinson,  "Pensions  and  Pauperism,"  page  10. 


PENSIONS  FOR  SERVICE  323 

and,  in  case  the  next  of  kin  were  so  remote  as  to  be 
removed  from  actual  dependency,  the  amount  de- 
ducted from  the  property  for  pension  purposes  was 
to  be  from  5  to  12  per  cent  more.  There  have  been 
advocates  of  this  plan  in  this  country' ;  but  the  argu- 
ments for  such  a  scheme  are  not  based  upon  such 
economic  and  politic  reasons  as  those  which  underlie 
the  proposition  to  finance  a  national  pension  scheme 
through  the  income  tax  law. 

We  hear  much  about  the  compulsory  safeguarding 
of  the  community  from  the  ravages  of  typhoid  fever, 
tuberculosis  and  other  contagious  and  destructive 
diseases.  Indeed,  civic  and  military  governments 
are  considered  blameworthy  and  are  unmercifully 
censured  if  they  do  not  protect  the  citizens,  whose 
servants  they  are,  from  the  onslaughts  of  preventable 
contagious  diseases.  A  city  will  invest  millions  of 
dollars  in  a  filtration  plant,  to  stop  the  pestilence  of 
typhoid  and  other  diseases;  and  in  that  event  such 
city  receives  the  praises  of  an  applauding  world. 
Gradually  our  whole  nation  has  come  to  realize  that 
money  spent  in  the  conservation  of  human  life  and 
natural  resources  is  an  investment  every  dollar  (jf 
which  will  return  a  handsome  dividend  to  the  people 
individually  and  collectively.  The  nation  and  the 
cities  are  rapidly  learning  that  compulsory  safeguard- 
ing of  the  life  and  limb  of  the  workingman  is  not  only 


324    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

humanitarian  but  economic;  and  employers  of  labor 
in  factories,  shops  and  transportation  enterprises  are 
showing  their  appreciation  of  safety  appliances  in  the 
interest  of  their  workers.  Every  dollar  spent  in 
appliances  for  saving  Ufe  and  health  is  an  investment 
for  profit,  as  well  as  for  benevolent  purposes.  A 
national  scheme  of  old  age  pensions  would  Ukewise 
be  an  investment  that  would  bring  splendid  dividends 
along  the  same  lines. 

It  may  require  millions  of  investment  to  solve  the 
probh  m  of  old  age  dependency  in  the  United  States; 
but  if  solved,  and  solved  right,  the  results  will  be 
incalculable  in  the  humanitarian  and  economic  realm. 

Conclusion 

Approximately  1,250,000  of  the  people  of  the 
United  States,  above  sixty-five  years  of  age,  are  depend- 
ent upon  public  and  private  charity,  to  the  amount 
of  about  $250,000,000  annually.  Thus  far  one  person 
in  eighteen  of  our  wage-earners  reaches  the  age  of 
sbcty-five  in  penury ;  and  the  indications  are  that  the 
proportion  of  indigent  old  is  uicreasing. 

There  arc  no  signs  of  abatement  in  the  causes  of 
this  deplorable  condition,  —  such  causes  as  misfor- 
tune, unemployment,  low  wages,  etc.  The  ilTorts  at 
_^,!.:.^,f  .,f  p5.(,^,pr5t  Mn-l  nt^n  iinii  destitution.  thouL'h  some- 
what widespread  and  in  the  main  praiseworthy,  are 


PENSIONS  POR  SERVICE 


remedial  but  not  curative,  —  they  may  make  a  contin- 
gent provision  for  the  old  age  necessities  of  perhaps  one- 
third  of  the  wage-earning  class  in  America;  whereas 
two-thirds  of  this  great  industrial  army  are  not  provided 
for  by  any  present  or  prospective  old  age  relic'",  other 
than  thai  afforded  by  the  operation  of  the  poor-laws. 

Strange  as  it  may  seem,  the  United  States  is  the 
only  great  industrial  nation  in  the  civilized  world  that 
has  not  already  attempted  a  practical  and  permanent 
solution  of  this  problem  of  old  age  dependency. 
Some  writers  on  this  subject  are  of  the  opinion  that 
the  reason  for  any  lack  of  cooperation  for  the  solution 
of  this  problem  is  the  individualism  that  has  main- 
tained in  this  countr>'  from  its  earliest  settlemrats 
down  to  the  close  of  the  first  decade  of  the  twentieth 
century.  This  philosophy  of  individualism  is  wrought 
into  the  constitution  of  our  nation  and  states,  underlies 
our  jurisprudence,  is  paramount  in  our  industrial  and 
commercial  activities  and  is  manifest  in  our  national 
literature  of  song,  story  and  history.  On  the  passing 
of  the  rural  or  agricultural  character  of  our  people, 
on  our  land  being  more  thickly  populated,  and  on 
our  employments  becoming  more  industrial,  we  are 
driven  of  necessity  to  consider  abandoning  the  indi- 
viduahsm  of  the  past,  and  to  look  forward  to  a  com- 
munity of  interest  to  which  our  urban  condition  and 
employments  are  fast  driving  us. 


326    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

It  is  admitted  on  every  hand,  by  those  who  have 
given  careful  attention  to  the  tendencies  of  our  indus- 
trial life,  that  the  state  must  soon  make  provision  for 
the  necessities  of  those  of  its  citizens  who  come  down 
to  old  age  without  sufficient  provision  for  a  comfort- 
able, self-respecting  and  respectable  existence.  Pub- 
licists and  economists  who  see  the  handwriting  on  the 
industrial  wall  of  the  {jrescnt  age  and  of  that  soon  to 
dawn  are  divided  into  two  classes,  which,  for  con- 
venience, may  be  designated  "annuity"  and  "pen- 
sion": the  former  admiring  greatly  the  provisions 
that  have  been  made  by  Germany,  France,  Belgium, 
Denmark  and  other  countries,  by  which  annuities 
may  be  purchased  by  compulsory  thrift  and  occupa- 
tional and  state  subsidy;  those  on  the  other  hand  be- 
lieving in  pensions,  adopting  the  philosophy  that  has 
brought  about  the  enactment  of  pension  laws  in 
Great  Britain,  New  Zealand,  Australia,  etc. 

The  annuity  class  has,  up  to  the  present  time, 
seemed  to  be  in  the  ascendancy  in  the  United  States, 
principally  because  their  philosophy  does  not  violate 
the  fundamental  doctrines  of  individual  thrift,  upon 
which  largely  our  national  prosperity  has  been  built. 
While,  on  the  other  hand,  the  logic  of  the  world  move- 
ment towards  pensions  for  old  age.  in:-Lead  of  annuities, 
as  well  as  the  locic  of  econnmic  ronson,  points  unmis- 
takably to  the  supremacy  of  the  pension  class  in  the 


PENSIONS  FOR  SERVICE  327 

ultimate  solution  of  this  national  problem.  The 
economic  reasons  for  this  prediction  have  been  set 
forth  in  the  preceding  pages  of  this  book.  It  remains 
now  to  assemble  them  together  in  a  series  of  points 
which  the  facts  presented  in  this  volume  make  promi- 
nent. 

First:  Annuities  purchased,  either  with  or  without 
state  aid,  do  not  provide  for  those  now  uf pendent 
or  approaching  dependency.  Even  if  the  government 
were  to  adopt  a  scheme  similar  to  that  recently  pro- 
mulgated by  the  French  government,  it  would  be  at 
least  two  generations  before  all  wage-earners  could  be 
provided  for  on  the  annuity  plan. 

Second:  Any  annuity  scheme  that  the  government 
might  prescribe  by  law  would  in  all  probability  fail 
to  be  all-inclusive,  just  as  such  schemes  do  in  Germany 
and  France,  in  that  they  provide  for  contributions 
or  deductions  from  wages  of  wage-earners  only; 
whereas,  the  experience  in  all  nations  h  that  any 
member  of  the  merchant  or  moneyed  class,  who  is 
usually  exempted  from  compulsory  contributions, 
may,  in  his  old  age,  be  even  more  dependent  than  a 
member  of  the  distinctive  wage-earning  class. 

Third:  Such  a  scheme  would  be  unpopular  in  this 
country,  principally  because  of  the  sentiment  of  imii- 
vidualism  her'-toiorc  referred  to.  and  also  larirolv 
because  wage-earners,  in  their  youth,  object  to  pacing 


328    OLD  AGE  DEPENDENCY  IN  THE  XJNITED  STATES 

for  something  which  they  may  never  receive;  and  most 
seriously  object  to  being  compelled  to  purchase  that 
which  they  are  unable  to  buy.  It  must  be  remem- 
bered in  this  connection  that  any  annuity  scheme  for 
the  solution  of  the  old  age  dependency  prublcm  must, 
in  the  nature  of  things,  be  by  governmental  compul- 
sion. Voluntary  thrift  has  failed  in  this  country  to 
av.iil  itself  of  the  many  opportunities  offered  for  mak- 
ing provision  for  old  age  comfort,  just  as  it  has  faUed 
in  other  countries;  that  is  to  say,  only  the  more  provi- 
dent of  the  great  middle  class  of  citizens  have  had  the 
inclination  or  the  ability,  either  to  deny  themselves 
comforts  or  luxuries  in  order  to  lay  by  money  or  accu- 
mulate property  for  the  support  of  old  age,  or  to  make 
periodic  contributions  towards  the  purchase  of  deferred 
annuities.  Whatever  provision  is  made,  therefore, 
in  this  country  for  the  relief  of  old  age  destitution 
must  be  made  through  governmental  compulsion, 
either  state  or  national. 

Fourth:  Any  compulsory  contributory  scheme  con- 
templates the  accumulation  of  such  a  fund  as  to  make 
such  a  scheme  utterly  impracticable  from  the  economic 
and  financial  standpoint.  This  point  may  be  illus- 
trated in  the  following  manner  :  Suppose  that  seventy- 
six  years  ago  the  national  government  had  established 
o  rompiilfiorv  scheme  by  which  every  citizen,  on  reach- 
ing the  age  of  twenty,  should  contribute  each  year 


PENSIONS  FOR  SERVICE 


thereafter,  so  that,  on  arriving  at  the  age  of  seventy, 
he  should  receive  from  the  government  an  annuity  of 
one  hundred  dollars  so  long  as  he  lived.    Suppose  that 
92.637  persons,  of  the  exact  age  of  twenty,  had  become 
amenable  to  this  law  each  year,  each  contributing  — 
under  the  American  Experience  Table  —  $2.5865  per 
annum  until  his  seventieth  birthday  or  prior  death. 
When  the  scheme  became  effective  in  its  operation  as 
to  all,  the  annual  payments  in  annvuUes  would  be 
$32,689,950;  the  amount  of  annual  contributions 
would  be  $9,265,482;   and  the  remainder  which 
interest  on  the  funds  would  needs  supply  would  be 
$23,424468.   On  an  interest  assumption  of  3^  per 
cent,  the  accumulation  necessary  to  supply  this 
interest  earning  would  be  $669,270,526.   It  must  be 
remembered  that  this  contemplates  only  92.637 
persons,  entering  each  year  at  age  twenty,  and  the 
continuance  of  the  scheme  for  seventy-six  years. 
Now  by  finding  out  how  many  tim.es  92,637  is  con- 
tained in  the  number  of  workingmen  and  working- 
women  aged  twenty,  and  multiplying  $669,270,526 
by  the  quotient,  a  rough  idea  is  obtained  as  to  the 
enormous  accumulation  of  funds  in  the  hands  of  the 
government  which  such  a  system  would  finally 
involve.   As  there  would  be  3,582,285  persons  between 
age  twenty  and  age  seventy  contributing  under  this 
plan,  the  total  lump  sum  required  may  also  be  roughly 


330    OlO  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

approximated  by  dividing  the  niunber  ol  workingmcn 

and  workingwomen  between  ages  tweniy  and  seventy 
by  -,,582,285  and  multiplying  $669,270,526  by  the 
quotient.  The  finite  mind  almost  quails  before  the 
stupendous  accumulations  which  such  a  scheme 
would  necessitate;  and  the  withdrawal  of  this  im- 
mense sum  from  the  capital  of  the  countr>',  needed  in 
its  industrial  development  and  welfare,  and  the  risk 
to  the  fund  through  pestilence,  war  or  the  untrust- 
worthiness  or  mistakes  of  government  officials  charged 
with  the  custody  and  administration  of  such  a  vast 
sum,  stamp  this  scheme  as  effectually  un-American, 
unnecessary  and  well-nigh  foolish. 

The  soluti<m  of  the  old  age  dqwndency  problem  in 
the  United  States  will  not  soon  be  reached  by  any 
plan  thus  far  put  forward  by  the  annuity  class  of 
economists.  Indeed,  in  the  face  of  such  points  as  are 
marshaled  against  it,  the  annuity  proposition,  predi- 
cated upon  any  thrift  scheme,  may  be  considered  a 
lost  cause  in  this  coimtry;  especially  is  this  true 
when  the  advantages  urged  by  the  pension  class,  for 
the  solution  they  olTer.  are  carefully  weighed. 

In  essence,  the  old  age  pension  scheme  is  nothing 
more  nor  less  than  the  nation's  acknowledgment  of 
the  debt  which  the  prc-ent  generation  owes  the 
survivors  of  the  past  generation.  Anv  man  or  woman, 
who  has  lived  for  sLxty-five  or  seventy  years,  doing 


PENSIONS  FOR  SERVICE 


the  best  possible,  under  all  circumstances,  even  mak- 
ing due  allowance  for  mental,  physical  or  moral 

frailties,  has  contributed  by  life  and  work  to  the 
making  of  the  world  a  better  place  to  live  in.  Every 
civilized  community  feel  the  obligation  to  provide 
such  an  one  with  shelte.  food  and  raiment ;  that  is 
to  say,  threescore  years  or  more  of  life  and  service 
are  as  so  many  duebills  whirh  tho  superannuated 
person  presents  to  the  working  generation,  and  which 
that  generation  cannot  deny  or  repudiate.  What 
the  pension  class  of  economists  urge  is  that  the  due- 
bills  01  the  old  shall  not  be  paid  grudgingly  and  by 
a  charity  that  suggests  a  beggarly  condition ;  but  in  a 
manner  that  pr^rves  and  exalts  the  dignity  of  the 
old,  sustains  his  self-respect  and  enables  him  to  move 
among  the  younger  generation  as  a  patriarch  honored 
for  having  lived  and  served. 

The  points  to  which  attention  may  be  called,  in  the 
solution  of  the  problem  offered  by  the  pension  class, 
may  be  summarized  as  follows :  — 

First:  It  is  manifestly  no  greater  burden,  on  the 
community  as  a  whole,  to  operate  a  government  pen- 
sion system  than  to  support  the  s^ed  dependents  on 
the  present  system  of  public  and  i  i\  ite  charity. 

Second :  The  community,  as  a  whole.  (,wes  the  dis- 
abled soldiers  of  the  nation's  indnsttinl  nrmy  as  tender 
consideration  and  ample  rewardr-  for  service  as  are 


33 2  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

recognized  to  be  due  the  veterans  of  the  nation's 

military  sen-ice. 

7  ird :  A  pension  schema  esta^  U^he  t)y  <  '  >nL'r  -.. 
and  operaleci  by  the  national  g<  \ernment.  ..wukl  tfi- 
(  'irage  the  mobiiity  of  Uiboi,  destroy  the  spirit  of 
b...vility  and  fear,  tluii  now  so  i;  n  domii.ates  .he 
wage-tamer,  and  w^juid  enhajKi  the  stability  and 
beau^  of  home  life,  m  that  the  aged  veteran  would  be 
welcc  to  a  place  of  counsel  and  honor  in  the  family 
circle,  now  too  often  dmie<  -wsn  because  his  supp(Ht 
is  too  heavy  a  draft  on  the  scant  earnings  of  his  chil- 
dren wd  srandchildrai. 

f  trth:  The  oper&ticm  of  a  pension  systan  by  the 
natiotml  ^vemment  is  as  scientific,  just,  and  impartial 
fe  annuity  scheme  Jrnt  Im  ever  been  plaimed  or 
i. 

and  insurance  men,  who  ha\  e  been  accus- 
tom- link  of  this  pr()l)lem  only  from  the  vi'^wpoint 
of  a  to  corporation  or  insurance  department, 

whu?c  minds  are  lllled  with  the  mathematical  formu- 
Lt  and  s;  ientitlc  principles  ;'ttending  the  purchase  of 
anuuitic  .  ma^."  challenge  this  last-named  point. 
Some  liti  e  attention,  therefore,  may  be  given  to  its 
elaboration. 

It  is  well  known  that  all  insurance  transact'  - 
that  is,  the  assumption  of  risks  whereby  ce 
demnities  are  promised  for  certain  contribu< 


PENSIONS  FOR  SERVICE  333 

experience  has  established  as  just  and  adequate  — 
res',  upon  '  lie  "last  man"  theory ;  that  is  to  say,  there 
inu>i  1)0  such  an  arcinuulation  and  contributions  as 
that  the  corp  ration  <>r  community,  assuminrj  the  risk, 
\v:!!  be  able  to  meet  cvi"-^-  obli;.:'  lion  that  mav  arise 
under  tlie  law  of  average,  even  ll  d  igh  ii<>  new  entrants 
come  into  the  scheme.  It  is  well  known  that  if  llif 
"last  man"  be  indelinitely  pi.-tpon.  d.  the  u<  cumula- 
tions necessary  to  rrcet  ihe  oi)ligation  arising  on  his 
behalf  may  also  be  indefinitely  diminished. 

Out  of  this  c(»»deratkm  grows  the  principle  that 
compulsion  of  new  entrants  may  take  the  place  of 
accmnulation  of  rawrves.  The  old  theory  of  assess- 
mentism  is  al^olutely  sound,  if  it  could  be  enforced. 
In  other  wofds,  in  a  ^e  inmtraa^  scheim  if,  on  the 
death  of  every  old  menier,  a  new  entrant  could  be 
compelled  to  come  into  the  or^uiization,  and  thus  keep 
the  ranks  full  at  ail  times,  under  the  law  of  averages, 
accumulation  of  r*  ser  s  would  not  be  absolutely 
essential  to  m&ke  the  plan  feasible  and  permanent. 

The  L!;o  ernr  nt  could  e-  forct  a  provision  of  this 
kind  as  to  any  "Id  age  relief  .her  c.  it  could  compel 
every  citizen,  on  reaching  ihc  agt  ni  twenty,  I  pay  over 
to  the  government  a  small  sum  per  >car,  w  hich  the 
wvernmt-nt  would  hold  and  in  est  and  out  of  which, 
•r  without  government  subventions,  an- 
'  paid  evenv  citizen  on  reaching  the  age 


334    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

of  sixty-five  or  seventy.  But  under  such  a  system  of 
compulsion  the  accumulation  could  be  indefinitely 
minified ;  and,  with  such  compulsion,  reserves  for  the 
fulfillment  of  obligations  would  not  be  necessary. 

It  has  already  been  shown  that  under  an  annuity 
system  which  would  inchide  3,582,285  persons  be- 
tween the  ages  of  twenty  and  seventy,  the  annuities 
to  the  survivors  at  seventy  —  under  the  American 
Experience  Table  of  Mortality  —  on  the  basis  of  one 
hundred  dollars  to  each,  would  amount  to  $32,689,950. 
It  has  been  shown  that  if  the  wage-e- >.mers  of  the  coun- 
try were  to  provide  for  this,  by  contributions  and  ac- 
cumulations, the  government,  even  for  that  number, 
would  be  required  to  have  on  hand  $669,270,526  when 
the  scheme  becomes  operative.  It  would  be  far  more 
economic  and  just  if  the  government  were  to  take  out 
of  its  treasury  each  year  $32,689,950  and  meet  its 
annuity  obligations  to  these  aged  dependents,  than 
to  require  them  to  have  segregated  such  immense 
fimds  from  the  capital  of  the  nation  as  would  be  nec- 
essary to  produce  the  required  annuities. 

Then,  again,  it  is  recognized  in  all  nations  which  have 
put  a  pure  pension  plan  into  operation  that  the  wage- 
earners  by  incidence  have  already  created,  in  the  general 
capital  for  the  work  and  welfare  of  the  country-,  an 
equivalent  of  the  funds  necessary  to  give  them  of  right 
a  support  in  their  old  age.    They  may  not  have  paid 


PENSIONS  FOR  SERVICE 


33S 


taxes  on  land  or  invested  funds;  but,  as  tenants,  the 

taxes  on  the  property  they  occupied  were  really  paid 
by  them,  and  as  laborers  in  the  employ  of  that  capital 
which  paid  taxes  levied  on  invested  funds,  their  waf 
were  drawn  upon  in  due  proportion.  There  ' 
tenant  or  laborer  in  the  United  States,  even  thoi- 
may  not  directly  pay  one  dollar  of  tax  through  his 
whole  lifetime,  who,  as  public  affairs  are  now  adminis- 
tered, has  not  contributed  an  equivalent  of  his  share 
of  the  acciunulation  necessary  to  provide  him  with  a 
support  for  his  old  age.  Therefore,  the  government, 
in  paying  out  annuities  according  to  the  plan  in  the 
illustration  used  above,  amounting  to  some  $32,000,000, 
is  practically  paying  the  laborer,  on  his  reaching  de- 
pendent old  age,  interest  on  the  accumulations  of 
national  wealth  which  his  labor  and  life  have  helped 
to  produce. 

The  principle  underlying  this  plan  of  pension  grants 
is  well  illustrated  in  the  operation  of  the  so-called 
English  "consols,"  —  the  term  used  in  financial  circles 
as  an  abbreviation  for  "consolidated  annuities." 
It  was  the  custom  of  the  British  government,  cen- 
turies ago,  to  grant  annuiries  to  subjects  who  had 
rendered  some  particular  service  to  the  crown.  In 
1751  the  outstanding  annuities  of  the  government 
were  consolidated  into  one  fund,  the  principal  of  which 
amounted  at  that  time  to  £9,137,821,  carrying  3 


336    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

per  cent  interest.  The  payment  of  the  interest  is 
obligatory;  while  payment  of  the  principal  is,  in  all 
cases,  "at  the  pleasure  of  the  government."  These 
obligations  have  been  increased  from  time  to  time 
until  "consols"  now  amount  to  a  sum  equal  to  more 
than  half  of  the  total  rutstanding  British  government 
debt.  The  holder  of  a  British  consol,  therefore, 
is  entitled  to  an  annuity  as  long  as  he  U^•es,  which, 
however,  in  many  instances,  represents  service  ren- 
dered and  not  money  invested. 

In  like  manner,  the  soldiers  and  sailors,  on  the 
Union  side  in  the  Civil  War,  "loaned"  the  government 
health  and  service,  quite  as  essential  as  the  loans  of 
money  by  banks  and  individuals.  The  banks  and 
individuals  held  the  government's  obligations  in  the 
form  of  bonds  on  which  interest  was  guaranteed  annu- 
ally, though  the  payment  of  the  principal  may  have 
been  postponed  for  many  decades.  The  pension  to 
the  soldier  and  sailor,  therefore,  may  be  regarded  as 
interest  on  the  "bond"  which  he  held  in  like  manner, 
Jor  seroice. 

So,  also,  the  soldier  in  the  industrial  army  has  loaned 
the  nation  his  strength,  time  and  service  ;  and  a  pen- 
sion paid  to  him  by  the  nation  may  be  justly  regarded 
as  interest  on  his  loan. 

To  the  objection  that  such  an  old  age  pension 
scheme  would  be  detrimental  to  the  thrift  habit,  it  is 


PEM-K  N.   FOR  SERVICE  337 

suflScient  to  rcpl}-  thac  in  all  other  countries  where  the 
g()\crnment  has  inauj^urated  old  .^g,.  pensions  there 
h;i;",  been  no  indicatu  n  that  the  p(x  ;)k  in  consequence 
arc  less  thrifty,  self-reliant  or  provident  than  they  were 
before  the  pension  scheme  was  ina.igurated.  If  the 
United  States  government  wer :  to  sa\'  in  effect, 
"Every  citizen  shall  receive,  application  therefor, 
at  sixly-iive  years  of  age,  one  hundred  dollars  each 
year  from  the  public  treasury  so  long  as  he  lives,"  this 
prom?  J  of  the  government  would  be  an  effectual  en- 
couragement to  every  citizen  to  acciunulate  funds  or 
property  that  would  enable  him  to  piirchase,  in  his  old 
age,  some  of  the  little  comforts  of  life,  in  addition  to 
the  bare  necessities  which  the  government  pension 
would  supply. 

The  objection  that  springs  most  spontaneously  to 
the  lips  of  the  well-to-do,  who  may  be  opposed  to  old 
age  pensions  because  such  scheme  implies  an  increase 
of  taxation  burdens,  is  this :  Is  it  proposed  that  I,  who 
have  been  pro\idcnt,  frugal,  temperate  and  thrifty, 
shaK  ,;av  for  the  support  of  the  loafer  and  criminal? 
This  objection  is  met  very  •  eadily  by  inquiring  how  the 
good  and  successful  citizen  is  now  absolved  from  the 
bur  kn  of  pro\-iding  for  the  support  of  his  slothful  or 
criminal  neighbor.  All  correctional,  refomiator;^  and 
relief  institutions  are  largely  maintained  by  the  tax- 
paying  portion  of  the  community.  The  improvident 
z 


338    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 


profligate,  even  if  placed  in  an  asylum  or  other  insti- 
tution, according  to  his  mental  or  physical  necessities, 
is,  nevertheless,  supported  by  the  honest,  faithful  tax- 
payer. Therefore,  an  objection  of  tiiis  kind  must  be 
regarded  as  specious  and  temporizing  in  character,  and 
not  as  of  sufTicient  weight  to  hinder  the  progress  of 
the  pension  movement  in  this  country. 

Thus  far,  every  objection  urged  against  a  national 
old  age  pension  scheme  has  been  readily  met,  not  so 
much  by  a  priori  argimient,  as  by  citing  the  working 
out  and  effects  of  such  schemes  abroad.  In  every 
other  coimtry  where  such  a  scheme  has  been  inaugu- 
rated, it  is  acknowledged  by  all  cla^s  and  parties  that 
it  has  come  to  stay,  —  because  it  ought  to  stay.  While 
in  some  details  of  administration  the  scheme  may  be 
amended  from  time  to  time,  there  is  nowhere  the  slight- 
est disposition  to  abrogate  or  abandon  the  principle. 
Encouraged  by  this  universal  testimony  of  approval 
in  every  country  of  its  adoption,  the  advocates  of  the 
old  age  pension  [)rinciple  in  this  country  are  confident 
that  the  time  is  oj^portune  for  pressing  the  camjmign 
for  its  inauguration  here.  Present  social,  industrial 
and  economic  conditions  point  inevitably  to  old  age 
pensions  as  the  best  possible  solution  of  the  problem 
of  old  age  dependency  in  the  United  States. 


APT>T2NDIX  A 


Sixty-Second  Congress,  first  Session.  H.  R.  No. 
131 14.  In  the  House  of  Representatives,  July  31, 
191 1,  Mr.  Berger  introduced  the  following  bill, 
which  was  referred  to  the  Committee  on  Pensions 
and  ordered  to  be  printed.  A  Bill  to  Provide 
Old  Age  Pensions. 

Be  it  enacted  by  the  Senate  and  Souse  of  Representa- 
tim  of  the  Unit^  States  of  America  in  Congress 
assembled. 

That  every  person  who  makes  satisfactory  proof 
before  the  authorities  hereinafter  designated  that 

he  (or  she)  — 

(a)  Has  reached  the  age  of  sixty  years ; 

(b)  Has  been  a  citizen  of  the  United  States  for  six- 
teen consecutive  years ; 

(c)  Has  not  been  conN-icted  of  a  felony ; 

(d)  If  a  husband,  has  not  without  just  cause  failed 
to  provide  with  adequate  maintenance  his  wife  and 
such  of  liis  children  as  are  under  sixteen  years  of  age ; 
or  if  a  wife,  has  not  deserted  any  of  her  children  under 
sixteen  years  of  age ; 

(e)  Is  not  in  receipt  of  an  income  from  any  source, 
exclusive  of  the  pension  herein  provided  for,  which, 

339 


340   OLD  AGE  DEPENDENCY  IN  TED£  UNITED  STATES 

for  the  twelve  months  previous  to  the  filing  of  his 
application,  has  averaged  six  dollars  a  week, 
—  Shall  be  pUi'^od  upon  the  pension  roll  of  the  United 
States  and  1  itled  to  receive  until  death  a  pension 
from  the  DiAi'  '  States  Government  provided  by  an 
anntial  appropriation  by  the  Congress.  Such  pen- 
sions shall  be  graded  according  to  the  following 
schedule :  — 

When  the  average  weekly  means  of  the  pensioner 
as  calculated  under  the  Act  do  not  exceed  six  dollars, 
four  dollars  per  week ;  exceed  dx  dollars,  but  do  not 
exceed  six  dollars  and  seventy-five  cents,  three  dollars 
and  twenty-five  cents  per  week;  exceed  six  dollars 
and  seventy-five  cents,  but  do  not  exceed  seven  dol- 
lars and  fifty  cents,  two  dollars  and  fifty  cents  per 
week ;  exceed  seven  dollars  and  fifty  rents,  but  do  not 
exceed  eight  dollars  and  twenty-five  cents,  one  dollar 
and  seventy- five  cents;  exceed  eight  dollars  and 
twenty-five  cents,  but  do  not  exceed  nine  dollars,  one 
dollar  per  week. 

Sf.c.  2.  That  every  person  claiming  a  pension  under 
this  Act  shall  file  with]]^the  Department  of  the  Interior 
an  affidavit  containing  such  statements  as  may  be  pre- 
scribed by  the  Secretary  of  the  Interior,  who  shall  also 
make  such  rules  and  regulations  as  are  necessary  to 
carry  out  the  provisions  of  this  Act. 

Sec.  3.  That  in  computing  the  term  of  residoice 


APPENDIX  A 


above  required,  such  periods  of  absence  from  the 
boundaries  of  the  United  States  as  have  been  under- 
gone by  the  claimant  while  in  the  service  abroad,  either 
civil  or  military,  of  the  United  States,  or  of  any  State 
or  Territory  thereof,  shall  be  counted  as  though  the 
claimant  had  then  lived  within  the  United  biates. 

Sec.  4.  That  in  ascertaining  the  income  above 
mentioned  accotint  shall  be  taken  — 

(a)  Of  any  pension  which  claimant  is  already 
receiving  from  this  or  any  other  Government. 

(ft)  Of  the  yearly  income  which  might  be  expected 
to  be  derived  from  any  property  belonging  to  that 
person  which,  though  capable  of  investment  or 
profitable  use,  is  not  so  invested  or  profitably  used  by 
him. 

(c)  Of  the  yearly  value  of  any  advantage  accruing 
to  that  person  from  the  ownership  or  use  of  any  prop- 
erty which  is  personally  used  or  enjoyed  by  him. 

(d)  Of  the  yeariy  value  of  any  benefit  or  privilege 
enjoyed  by  such  person. 

Sec.  5.  That  in  calculating  the  means  of  a  person 
being  one  of  a  married  couple  living  together,  the 
means  shall  not  in  any  case  be  taken  to  be  less  than 
one-half  the  total  means  of  the  couple:  Provided, 
That  when  both  husband  and  wife  are  pensioners, 
except  where  they  are  living  apart  pursuant  to  any 
decree,  judgment,  order,  or  deed  of  separation,  the 


342    OLD  AGE  DEPENDENCY  IN  THE  UNITED  STATES 

rate  of  pension  for  each  shall  be  three-fourths  of  the 
rate  given  in  the  above  schedule. 

Sec.  6.  That  the  pension  hereunder  may  be  in- 
creased or  decreased  every  twelve  months,  whenever 
the  pensioner's  income  decreases  or  increases  according 
to  the  terms  of  the  schedule;  and  the  Secretary  of 
the  Interior  shall  make  all  needful  regulations  for 
providing  for  this  change  of  rating. 

Sec.  7.  That  this  Act  is  amendatory  of,  and  sup- 
plemental to,  all  existing  statutes  touching  pensions, 
and  aU  such  statutes  in  all  respects  are  hereby  declared 
to  apply  to  and  to  protect  claimants  tmder  this  Act, 
precisely  as  though  they  had  been  in  form  incorporated 
herein. 

Sec.  8.  That  the  said  pension  shall  be  paid  in 
thirteen  instalments  in  each  year  in  advance.  It 
shall  begin  on  the  date  when  the  claim  is  filed,  and 
the  arrears  from  that  time  to  the  time  of  allowance 
shall,  if  the  claimant  be  then  living,  but  not  other- 
wise, be  paid  in  a  lump  sum. 

Sec.  9.  That  in  case  any  person  entitled  here- 
under is  an  incompetent  or  is  incapable  under  the 
law  where  such  person  resides,  the  claim  lor  the  pen- 
sion of  such  person  may  be  made  and  the  pension  may 
be  collected  for  such  persoi  y  any  person  or  persons 
appointed  under  the  local  law  as  guardian,  conserva- 
tor, tutor,  or  the  like,  of  such  claimant. 


343 


Sec.  lo.  That  this  Act  shall  be  liberally  adminis- 
tered to  effect  its  purpose,  which  is  to  provide,  out  of 
the  public  purse,  sufficient  income  for  the  old  to  enable 
them  to  enjoy  the  last  remaining  years  of  their  lives 
in  such  freed<nn  from  the  fear  of  want  as  they  have 
earned  by  a  long  service  for  society  as  citizens  of  the 
Republic. 

Sec.  II.  That  in  accord  with  paragraph  two, 

section  two,  Article  III  of  the  Constitution,  and  of  the 
precedent  established  by  the  Act  passed  over  the 
President's  veto  March  twenty-seventh,  t.ghteen 
hundred  and  sixty-eight,  the  exercise  of  jurisdiction  by 
any  of  the  Federal  courts  upon  the  validity  of  this 
Act  is  hereby  expressly  forbidden. 


I  here- 
ler  the 
le  pen- 
)n  may 
persons 
ttserva- 


APPENDIX  B 


Sixty-first  Congress,  second  Scsiion.  H.  R.  No. 
14494.  In  the  House  of  Representatives,  December 
14,  1909,  Mr.  Wilson  of  Pennsylvania  introduced 
the  following  bill,  which  was  referred  to  the  Com- 
mittee on  Military'  Affairs  and  ordered  to  be  printed. 
An  Act  to  organize  an  Army  Corps,  prescribe 
Qualifications  tor  Enlistment  therein,  de- 
fine the  Duties  and  fix  the  Compensation  and 
Tebm  of  Enlistment  of  Privates,  and  for  Other 
Purposes. 
Be  it  enaOei,  etc. 

HaX  immediately  after  the  passage  of  this  Act, 
an  Army  Corps  shall  be  organized  in  the  Depart- 
ment of  War,  under  the  direction  of  the  President, 
to  be  known  as  the  Old  Age  Home  Guard  of  the 
United  States  Army. 

Sec.  2.  The  Old  Age  Home  Guard  of  the  United 
States  shall  be  composed  of  persons  not  less  than 
sixty  uve  years  of  age. 

Sec.  3.  Any  person  who  is  sixty-five  years  of 
agf".  or  upwards,  and  who  has  been  a  resident  of  the 
United  States  twenty-five  consecutive  years,  and  a 

344 


APPENDIX  B 


345 


citizen  of  the  United  States  fifteen  consecutive  years 
next  preceding  the  date  of  application,  and  who  is 

not  possessed  of  property  amounting  to  more  than 
fifteen  himdred  dollars  in  value,  free  of  all  incum- 
brances, or  an  income  of  more  than  two  hundred  and 
forty  dollars  per  annum,  and  who  has  not  sequestered, 
or  otherwise  disposed  of  property  or  income  for  the 
purpose  of  qualifying  for  enlistment  as  hereinafter 
provided,  may  make  application,  in  writing,  to  the 
Secretary  of  War,  for  enlistment  in  the  Old  Age 
Home  Guard  of  the  United  States  Army,  and  it  shall 
be  the  duty  of  the  Secretary  of  War  to  enlist  and  enroll 
such  applicant,  for  the  term  of  his  or  her  life,  as  a 
private  in  the  Cid  Age  Home  Guard  of  the  United 
States  Army  without  regard  to  the  physical  condi- 
tion of  the  applicant,  provided  that  penons  related 
as  husband  and  wife  shaU  not  both  be  eligible  Ua 
enlistment,  enrollment,  and  service  therdn  at  the  same 
time,  and  in  case  of  dispute  as  to  whether  husband 
or  wife  shall  be  enlisted  and  enrulled,  as  herein  pro- 
vided, the  question  shall  be  decided  by  the  Secretary 
of  War,  by  and  with  the  approval  of  the  President. 

Sec.  4.  The  pay  of  a  private  in  the  Old  Age 
Home  Guard  of  the  United  States  Array  shall  be  one 
hvidred  and  twenty  dollars  per  annum,  to  be  paid 
in  quarterly  instalments,  as  pensions  are  now  by  law 
paid,  provided,  thai  ten  dollars  per  anniun  shall  be 


346    OLD       E  DEPENDENCY  IN  THE  UNITED  STATES 

deducted  l  orn  the  pay  of  each  private,  and  retained 
in  the  trt\  iry  of  the  United  States,  for  every  one 
hundred  doluirs'  worth  of  projn  rty  in  excess  of  three 
hundred  dollars,  and  for  every  ten  dollar:;  per  annum 
income  in  exe  t  ss  of  one  hundred  and  twenty  dollars 
possessed  by  such  private. 

Sec.  5.  Arms  and  ammunition  shall  be  fur- 
nished to  privates  in  the  Old  Age  Home  Guard  of  the 
United  States  Army  at  the  discretion  of  the  Secretary 
of  War,  but  no  sustenance  shall  be  furnished  to  them 
«ccept  the  pay  herein  provided. 

Sec.  6.  No  private,  or  applicant  for  enlist- 
ment as  private,  shall  be  required  to  leave  his  or  her 
home  for  the  purpose  of  enlistmoit,  enrollment,  ot 
service  in  the  Old  Age  Home  Guard  of  the  United 
States  Army,  nor  shall  they  be  required  to  assemble, 
drill,  or  perfomi  any  other  maneuvers,  nor  be  subject 
to  any  of  the  regulations  of  the  United  States  Army, 
excep.     h'^  provided. 

Sec.  7.  Privates  in  the  Old  Age  Home  Guard 
cf  ih.-  United  States  Army  shall  be  required  to  report 
annually,  i  i  writing,  to  the  Secretary  of  War,  on  blank  s 
furnished  by  him  for  the  purpose,  the  conditions  of 
military  and  patrioticsentiment  in  the  community  where 
such  private  Hves,  but  no  private  shall  be  discharged , 
disciplined,  or  otherwise  punished  for  failure  to  make 
such  report. 


APPE.NfDDC  B 


347 


Sec.  8.   The  number  of  persons  enlisted  in  the 

Old  Age  Home  Guard  of  the  United  States  Army 
shall  be  in  addition  to  the  number  of  nfriccrs  and 
t)rivates  now  requirt.d  by  law  in  the  United  States 
Army. 

Sec.  q.  All  acts  and  parts  of  acts  inconsistent 
with  the  provisions  of  this  Act  are  hereby  repealed. 


ADDENDUM 


NEW  YORK  CITY  TEACHERS'  RETIREMENT  FUND 

Since  this  book  was  put  into  type,  The  Eastern  Under' 

writer  (issue  dated  February  29,  191 2)  reports  that  Con- 
sulting Actuary  S.  H.  Wolfe  of  New  York  City  has  made, 
at  the  request  of  several  public  school  teachers  in  the 

City  of  New  York,  an  investigation  into  the  operation  of 
the  teachers'  retirement  fund  in  that  city,  from  which 
report  the  following  extracts  are  taken  :  — • 

"I  consider  this  retirement  fund  one  of  the  most  stupendous 

muiiiii[)al  swindles  ever  pcrpctratid,"  s.iid  Mr.  Wolfe  to  u  Wcrld 
rc|«)rtcr  last  night.  "  I  don't  know  who  is  rcs|)onsil)le  for  it,  but  I 
do  know  that  the  retirement  of  t'jachcrs  will  luu  e  to  cease  shortly, 
and  it  will  then  be  necessary  to  wait  uiuil  death  reduces  the  ranks 
siiinciently  to  enable  the  retirement  to  be  resumed.  In  the  mean- 
time, the  teachers  now  retired  who  have  paid  one  per  cent  of  their 
salaries  into  the  fund  will  get  nothing  in  return.  ...  It  appears  that 
during  the  first  seven  m<mths  of  1911  there  were  forty-nine  entrants 
to  the  fund  and  ten  deaths,  or  a  net  gain  of  thirty-nine,  thus  eslab- 
li'-hing  a  fairly  constant  ratio.  It  is  dear  to  me  that  within  the  next 
seven  or  eight  years  the  fund  will  be  reduced  to  $800,000  and  that 
the  contributions  from  that  time  will  not  only  be  insufficient  to  permit 
any  further  retirements  for  many  years,  but  will  be  insufficient  to 
provide  for  payments  to  all  those  on  the  retiionent  rdl  at  that 
time."  Mr.  Wolfe  gives  the  number  of  annuitants  on  December  31, 
igi  I,  as  1200  and  the  condition  of  the  fund  on  that  date  as  $1,500,000 
as  against  $1,596,065  on  December  31,  igio.  The  da  rcasc  amounts 
to  $y6,Q6s.    The  decrease  for  the  year  before  was  .  .  . 

Mr.  Wolfe  is  also  credited  as  saying  that  the  whole  theorj'  is  wrong, 
as  one  per  cent  of  a  teacher's  salary  is  taken  away  from  him  on  the 
idea  thac  he  will  receive  a  pension  on  retirement.  This  payment  he 
io  sure  from  his  deductions  cannot  be  made. 

Attention  is  called  to  this  matter  for  the  reason  that  it 
is  an  indication  that  the  dangers  iwinted  out  (see  pages 
274-277)  by  Mr.  M'Lauchlan  and  Mr.  King  as  likely  to 
arise  in  schemes  or  funds  not  based  on  sound  actuarial 
I)rinciples  may,  in  the  near  future,  become  actual  in  the 
operation  of  many  of  the  municipal  and  corporation 
pension  plans  adopted  in  America. 


BIBLIOGRAPHICAL  INDEX 


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American  Statistical  AsMiciation.  Quarterly  Publications  of ,  44.  45 

Berger,  Victor  L.,  Congressional  Kecoril.  14,  280,  295.    A  Bill  to  Provide 

Olil  Age  Pensions,  '..jij. 
Bulletin  of  United  States  Bureau  of  Labor,  26,  27,  42,  66. 
Carnegie  Foundation,  1910  Report,  187-192. 
Census  Bureau  Report  on  "Manufactures,"  41. 
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5,  6,  9.  12,  13.  25.  29.  67,         -MS.  148,  271,  273,  314. 
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Mitt  hell,  J<An,  in  PMuMpUa  North  Aumkam,  33. 

349 


BIBLIOGRAPHICAL  INDEX 


MXauchlan,  James  J  ,  "The  Fundamental  Principles  of  Penstoo  Funds," 

Mdclern  Labor  Prohlims,  John  Mitihell,  i  j. 
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27- 

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New  York  Bureau  of  Labor  Statistics,  jo. 

New  V(jrk  State  (  ensua  Keiwrt,  jj. 

New  Zealand  (Jtraial  Year  Book,  jo2. 

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Old  \t;e  Pensions,  William  Sutherland,  Og,  313. 
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-•SI- 

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Spahr,  Charles  B.,  "  Present  Distribution  of  Wealth  in  the  United  States,"  30, 

Standard  of  Living  in  New  York  City,  R.  C.  Chapin,  240. 

State  Insurance,  Frank  W.  Lewis,  4,  24,  iS,  255.  2(ig. 

Stead,  Franc  is  Herbert,  M.A  .  -llowCMd  Age  Pensions  Began  To  Be,"  15. 

Survey,  The.  Pension  Proposal  for  .New  York  ("ity,  lij. 

Sutherland.  William,  "Old  Age  Pensions,"  Og,  313. 

The  .\mcrican  Workman,  ICmile  Lcvasaeur,  30. 

The  Labor  (iazctte  (Canada),  43,  45. 

The  S.  i.  iolo^'ical  Review,  J.  .A.  Ilobson  on  " Old  Age  PenaiOlU,"  as?. 

The  \'  ige  Ouestion,  F.  .\.  WalU  r.  ig. 

Tr.m  .ut ions  of  the  Insurance  ami  .\ctu.irij!  Society  of  (ilasgoWi  277. 
Vanderlip.  F.  A,,  in  C'onfcrence  of  Charities  .uid  Correction,  73. 
Vic  toria  ()rth  i..i  Year  Book,  303. 

Wages  and  Hours  of  Labor.  Commissioner  of  Labor  Report  on,  3g,  43. 

W:i>;es  in  the  United  States,  Scott  Nearing,  30,  <»7,  34Q. 

Walker.  F.  A.,  "The  Wage  Ouc  -lion,"  3g. 

VVariier,  ,\,  d  ,  "American  Charities."  25. 

Wilkinson,  J.  I'rome,  "Pensions  and  Pauperism,"  235,  322. 

Wilson,  W.  B  .  Proix)se<l  Pension  Bill,  ui.  ill- 

Wolfe,  S.  I!     'oirt  on  Teachers'  Retiremc  tit  Fund.  New  N'ork  City,  348. 
Workiimnii -  i  u  .iiran. c  in  I-",uiof)r.  Frankel  .ind  Dawvm,  304,  U3. 
Workmen's  Insurance  and  Benefit  Funds,  Conunissioncr  of  Labor  Report  on, 
i7.  SS.  56,  64.  65. 


GEOGRAPHICAL  INDEX 


Alabama,  141- 
Albany,  \.V.,  i&s. 
Antwerp,  223. 
ArKi-ntinc  Kcpubli.',  ijg. 
Arizona,  141. 
Arkansas,  141. 
Atlanta,  Ga.,  34,  144. 
Australia,  139,  297,  326. 
Austria,  139,  241,  397- 

H.iltimore,  Ntd.,  151.  196,  212. 
HilK'ium,  139,  284,  297,  301,  32O. 
Hirlin,  223. 
lu'iiiiflit'in,  I'a..  34. 
i!innin>,'ham,  Al.i-.  .S. 
ltiriTiiiiKli;im,  I'.iiKlaml,  223. 
H'.n.-,  Idaho.  144. 

Ii'Kt(,n,  Mass.,        196,  JI3,  225,  226. 

I!rr-I;m.  .-23, 

lir(«>k.lyn,  X.Y.,  140. 
Bufialo,  N.Y.,  lbs- 

California,  141. 

Camden,  N.J.,  iq8. 

Canada,  44,  45,  187,  291-393. 

Charleston,  S.C.,  178. 

('haltanoofja,  Tenn.,  198. 

("hii  ago.  III.,  34,  14s,  198,  212,  333. 

Chile,  139. 

China,  53,  312- 

Cincinnati,  Ohio,  171,  109,  213 
Clevel'nd,  Ohio,  171,  200,  213. 
Coloraau,  141. 

Columbus,  Ohio,  171,  201,  314. 
Connecticut,  142. 

Dallas,  Texas,  zti. 
Dayton,  Ohio,  171. 
Delaware,  7,  143. 
Denmark,  69,  297,  300,  326. 
Denver,  Colo.,  141,  2x4,  310. 
Des  Moines,  Iowa,  202,  215. 
Detroit,  Mich.,  IJS,  203. 
District  of  Columbia,  143. 
Dresden,  223. 
Duluth,  Minn.,  156. 


r.dinburgh,  223 

Klmira,  N.Y.,  105. 

Kngland,  15,  159,  235,  283,  304. 

Europe,  304. 

Finland,  139. 
I'Iori<ia,  144,  231 

FraiKc,  139,  245,  285,  297,  306-309, 
Frankfurt,  Germany,  223. 
GeorKia,  144. 

Germany,  245,  tjt,  aSx,  297-300, 

J2U,  327. 

Glasgow,  274. 

Grand  Kapids,  Mich.,  34,  156,  215. 
Great  Britain,  14,  56,  69,  241,  297, 

326. 

Harrisburg,  Pa.,  173. 
Idaho,  144. 

Illinois,  14  s,  198,  2 12,  33a,  933. 
Indiana,  146,  303. 
Indianapolii,  Ind.,  146,  303. 

Iowa,  147. 

Ireland,  139. 
Italy,  139,  297, 

Japan,  130,  3"- 

Kalamaioo,  Mich.,  156. 
Kansas,  148. 

Kansas  City,  Mo.,  304, 115. 
Kentucky,  7,  149- 

Lansing,  Mich.,  156. 
Liverpool,  223. 
London,  233,  ssi- 
Los  Angeles,  Cal.,  8. 
Louiaana,  149,  205. 
Looisville,  Ky.,  149' 
Lyons,  333,  335. 


Madrid,  333. 
Maine,  130, 

3SI 


352 


GEOGRAPHICAL  INDEX 


Manchester,  England, 
M  irsfilles,  223. 
Maryland,  7,  151. 

Massachusetts,  4,  5,  6,  7,  8,  9,  10,  11, 
12,  13.  I4>  34,  IS,  29,  I5t,  332,  lis, 
24s,  248,  286-290. 

Mi  Jtico,  ijQ. 
MithiRan,  \$$. 

Milwaiikcc.  \V;3.,  182,  205,  215. 
Minnea[)oiis,  Minn.,  156,  3l6. 
Minnesota,  is6,  21b. 
Mississippi,  157. 
Missouri,  IS7>  208,  215. 
M«»tana,  i59' 

Nebruka,  150,  217. 

Nevada,  160. 

Newf.)uniil;in<l,  187. 

New  ll.imi)shirc,  100,  2,\i, 

New  Haven,  Conn.,  14^. 

New  Jersey,  160,  2jq. 

New  Mexico,  i(>,i. 

New  Orleans,  I, a.,  140,  ^05. 

New  South  \\  ales,  ,502. 

New  York,  7,  jo,  ji,  3.',  .?,5,  ,14.  ^8, 

140,  Id!,  108. 
New  York  City.  32.  34,  140,  id  j,  205, 

2\t\.        240,  U'''> 
New  Zi  alanil,  2<o,  !g7,  302,  31.',,  326. 
North  Caroli-.a,  i6(}. 
North  Dakota,  170. 
Norw.ty,  1  241. 
Nuri'nU:rg,  223,  225. 

Oakland,  Cal.,  8. 

Ohio,  7.  170. 

Oklahoma,  171. 

Omaha,  Neb.,  15Q,  206,  317. 

Ontario,  Can.,  ijg. 

OreRon,  7,  8,  171. 

Ottawa,  Can ,  43. 

Paris,  22-.  234. 
Parkenburg,  W.  Va.,  181. 
Pennrylvania,  30,  172. 
Philadelphia,  Pa.,  175,  306. 
Pittsburgh,  Pa.,  173,  217. 
Portland,  Ore.,  8. 
Portf.  Rico,  185. 
Prov.  Vnrc.  R  f..  177,  307. 

Quebec,  Can..  139. 


Rhode  Island,  176. 

kii  hmond,  Va.,  207,  218. 

Rochester,  N.Y.,  165,  i66,  208,  3l8. 

Rotterdam,  323. 

Russia,  ijg,  241. 

Saginaw,  Mich.,  156. 

Saint  Louis,  Mo.,  157,  308,  3jg. 

-Saint  Paul,  Minn.,  156,  319, 

Salt  Lake  City,  Utah.  180. 

San  Francisco,  Cal.,  209,  330. 

Saxony,  ijq. 

Schenectady,  N.V.,  165. 

Scotland,  274. 

Seattle,  Wash.,  8,  20Q,  231. 

Servia,  130. 

South  Carolina,  178. 

South  Dakota.  178. 

Spain,  13Q,  241. 

Spiikane,  Wash.,  8. 

Springfield,  111.,  210. 

SprinKiield,  Mass.,  310,  33* 

Stockholm,  223. 

Suixrior,  Wis.,  3io,  331. 

Sweden,  130. 

Switzerland,  i.io,  297. 

Syracuse,  N.Y.,  165. 

Tacoma,  Wash.,  331. 
Tennessee,  178. 

Texas,  178. 

Tuled  ',  Ohio,  171,  303,  333. 
Topeka,  Kan.,  222. 
Toronto.  Can.,  310. 
Troy,  N.V.,  165. 

Unitol  States,  3,  s,  6,  7,  8,  0,  10,  11, 
1 25,  27,  29,  34, 42,  47, 48,  sc.  57, 
1 87,  2  29,  230,  295,  3 JO.  3as,  330- 

Utah,  179. 

Vermont,  180. 
Victoria,  303. 
Vienna,  22,^,  341. 
N'irRinia,  180. 

Washington,  7,  181,  309,  33i. 

Washington,  DC,  143. 

West  Virginia,  181. 

Wiiconsin.  18..  J05,  21s,  331,  391. 

Wyoming,  185. 


TABULAR  INDEX 

Table 

N'o. 

I.  Dependent  Population  Sixty-five  Years  Old  and  Over  .   ...  6 

II.  Weekly  Incomes  and  Expenses  of  N<m-dependent  Aged  Poor.   .  la 

III.  Labor  Unions  Paying  Unemployment  Benefits   37 

IV.  Laborers'  Hours  and  Wages  by  Occupations  (Males)  ....  40 
V.  Average  Per  Cents  o{  Increase  shown  in  Cost  of  Living  by  Whole- 
sale Prices  in  Canada  in  1909   44 

VI.  United  States  Letter  Carriers'  Retirement  Association  Monthly 

Premium  Rates  for  Annuities  of  One  Hundred  Dollars    .   .  t  o 

VII.  Municipal  Pensions  in  European  Cities   jjj 

VIII.  Twenty-year  Endowment  Table   265 

IX.  Cost  of  $100  Insurance  and  Annuity   266 

X.  Massachusetts  Annuity  Rates   aS; 

XI.  Massachusetts  Annuity  Rates  (Premiums  Returnable)   .   .   .  288 

XII.  Maaiadiusetu  Combinatioa  Pduy  Rates   289 


2a 


TOPICAL  INDEX 


Accident'. ,  26. 
Alnishousps : 

Dcfuilive  Inmates,  13,  ap. 

Dreiul  of.  lO,  54. 
Population  and  Cost,  6. 

Population  in  rnili-d  States  and  Massachusetts,  8,  q,  10. 

Kocniit  j  from  What  (.Masses,  jo. 
Ameriian  Kederatiun  of  Labor: 

Ci.r.ver.tiun,  Di  r.vcr,  x 908,  310. 

Number  of  I'nions,  55. 
Amerii  an  Statittical  AModation,  44-45. 
Annuitit-'S ; 

Cunadi.in  '"loveriinnnt  Scheme, 

Purchase  "i,  .Not  K\ti  nsive,  2OO,  286,  293-294. 

Purchase  I,  through  (iovernment: 
Belgium,  .'S4-28S.  301. 
Denmark,  (oo. 
England.  iX^. 
Kranrr,  .-.Ss. 

Ral(S  for  l.et'.er  Carriers',  60-61. 

The  .Masi.u  huieiti  Plan.  287-Jgo. 

Thv-  Wisconsin  Plan,  2gi. 

Through  Insurance  Companies,  263-J68. 

Through  Savinijs  Banks,  246- 247. 

Through  Stale  Insurance  Tunds.  :y4. 
Carnegie  i Ouudation  for  the  Advancement  of  Teaching,  The,  186-192. 
Charity : 

Forms  of.  4. 

(jrowlh  of,  5j. 

Recent  Development,  10. 
Conservation,  27,  323. 
Cost  of  Living : 

.\mong  tlu  Old,  1  2. 

Comparative  Increase  in  Canada,  44. 

For  Liquors,  25>!-25g. 

For  Mediiine,  27. 

In  M.issaLhusetls.  24S. 

Minimum  Standard,  ,59,  41,  46,  249. 

Ri^K!  of  Prices,  44-46. 
Depiadenis  : 

.M)lc-bodi'  d,  Percentage  of,  19. 

In  Massachusetts,  j,  6. 

354 


TOPICAL  INDEX 


35S 


In  United  States,  s,  6. 

Maintenance  oi,  i,  4,  6,  ^20,  324. 

Number  of,  j,  s,  6,  14,  J24. 
Firemen's  Pension  Funds,  JI1-J22. 
Fraternal  Benefit  Societies: 

Court  Decisions    ncerning,  68. 

Number  of,  Proimaiag  Old  Agt  B«B«ftt^  67. 

ProUcms  of,  68. 

Readjustment  I'^ra,  7 1 . 

Recommendation  conccrninf'  ^17. 
Iili-al  Community,  The,  243. 

JminiRration :  Its  Bearing  on  tiic  iJepeadency  Problem,  jj-j5. 
Iru  Idence,  315,  330i  M4.  337. 
Incomes : 
Average,  49. 

Inadequate,  40-46,  248,  241),  251,  255,  jg6. 

I.ossin  Karning-!  by  lllnfs<i,  '7  -28. 

Loss  in  Unemployment,  30-36. 

Low  Wage  Occupations  Crowded,  46. 

Mai  hinory  Ixss«'ns,  3^. 

Minimum  Standard,  3g,  41  -46,  249. 

Of  Aged  Non  d'.pendrnts,  12-13. 

Of  Aged  I'ocir,  llreat  Britain,  is. 

Pension  Scheme  by  Taxing,  321-323. 

Percentage  of  Incrca-c,  43-46. 
Individualism  in  Uniti-     '  iles,  325- 
Industrial  Establishments; 

Reasons  fur  Pensions  in,  73. 

Retirement  .Allowances,  72-108,  274-277. 

Retirement  Scherues  of,  72-108,  274  277. 

American  E.ipress  Company,  74. 

Armour  and  Company,  75. 

Boston  Consolidated  Gas  Company,  77. 

Cambria  Steel  Company,  77. 

Carnegie  Relief  Fund,  gs. 

Chicopce  Manufact  uring  Company,  78. 

Consolidated  Gas  Company  of  New  York,  78. 

Deere  and  Company,  79, 

Du  Pont  de  .N'emoiirs  Powder  Company,  E.  I.,  79. 

First  National  Bank  of  Chicago,  102 

Gillicrt  atid  Harki  r  Company,  80. 

Gorham  .Manufacturing  Company,  81 . 

Hihbar.l,  S;irn.rr,  Bartlett  and  Company,  81. 

Intimation  il  Harvester  Company,  84. 

Morris  and  Company,  85. 

National  Carbon  Company,  80. 

Nov  l!nt;l,in.l  Companies,  10:. 

Phi.  i('c-!i)liia  K.lectric  Company,  87. 

I'ittsbur^;h  Coal  Company,  87. 

Proctor  and  Gamble  Company,  8g. 


3S6 


TOPICAL  INDEX 


Pubfic  Sarvice  Currtoration  uf  Sew  Jenqr,  go. 
Shenrin-WiUiama  Company,  gi. 
Simondii  Mjnufai  turiiiK  C«mpuyi9a. 
Standard  Oil  Company,  gj. 
Talbot  Mills,  .J4. 

United  Cigar  Store*  Company,  04. 

I'niteil  States  Steel  and  Carnegie  PauioB  FlUldt  95. 

Wells.  FarRo  and  Company,  1)7. 

WeMi  rn  Kletlrii  (Dmpany,  ij8. 

Westin^house  Air  Hrake  Company,  oq. 

W'itherbee,  Sherman  and  ComfiUy,  1bc.|  IOI. 
Insurance  Comp:inies: 

Annuity  Mans  .ind  Rates,  adj-tyo. 

Critiiisms  of,  2(18,  j^q. 

The"(iroup"  Plan  .'70. 
Interstate  CiiinmerLe  <    umission.  41. 
Labor : 

American  Federation  of,  55,  310. 

Commissioner  oi,  KMpatt,  37,  so,  43t  SS>  S*»  •4. 65- 

Factory.  .i5- 
Forecast.  4<) 
Physical  Efficiency,  46. 
Cnderpai'l.  41. 
Wases  and  Hours,  39-41. 
Labor  Organizations: 
Descrijition  of  Hcnefits  in.  65. 
Summary  of  Benefits  P,iid,  55-  Wi. 
Unemployment  Benefits,  36-37. 

AmiigmaM  Anodatton  of  Stnct  aad  Qectiic  RaUway  Employwi, 

63. 

Amalgamated  Society  of  Carpenters  and  Joincn,  56. 
Amalgamated  Society  of  F.n«ineers,  58. 
American  Keiieration  of  I  sij,  310. 

Cigar  Makers'  International  Cnion  of  Amcri.  a,  57. 
(lerman  American  Typographi.i,  <i.i. 

Ciranil  Internation.il  Brotherhixxl  of  Locomotive  Engineers,  58. 

Granite  Cutters'  International  Association  of  America,  59. 

International  Association  of  M.ichinist3,  61. 

International  Jewelry  Workers'  Union,  57. 

In!t  rnational  Typographical  Union.  64. 

I'.r  icrn  Makers'  League  of  North  .\mi'rica,  62. 

UnilP<l  .\ssociation  of  Journeymen  rUimher*.  Gas  Fitters,  Steam  Fittert 

and  Steam  Fitters'  1I(1|hts  of  the  L  riited  St  jles  an<l  Canada,  62. 
United  States  Letter  Carriers'  Retirement  Asaociatiua,  $9- 
Loss: 

In  Earnings  27,  28. 
Of  l'ro[>crty,  25 
Of  Savings,  j8,  250 
Of  Time,  ,50-3  j. 
Of  Wagci,  37,  38. 


TOPICAL  INDEX 


357 


UaUdjustment : 
CommiMion  to  Study,  tjo- 

Economical  and  MonI, 

(kneral,  355. 

(icncral  Effects  of,  196. 
Manufacture : 

Census  Report  on,  41 . 
Ma<«a(  husett:!  Commission  on  Old  Age  Pensions,  Anauitks  and  Iniurancc: 

Authurizatiun  oi,  $• 

linilinRS  on : 
Almshouses,  q,  ig. 

Dependents  as  Basis  for  United  States,  6. 

Incomes  and  Expenses,  Non-d^MBdcat  A|ad  FMr.  IS. 

Non -dependent,  s,  ij,  13. 
Percentages  Able  to  Work,  13. 
Persons  in  Massachusetts  over  Sixty-five,  5,  6. 
Retirement  FunH<,  573 
Sickness  and  Poverty,  29. 
Thrift,  a4S,  a4S. 
Mislurtune ; 
Among  Womea-woAtn,  ssi. 
Causes  oi,  35. 
In  Old  Age,  3".  Sty- 
Misfortune,  34-38. 
New  Jersey  Commission  on,  a39> 
Unemployment,  30. 
Model  Pension  Fund.  274-277. 
Municipal  Pension  Systems,  :q3-2j8. 
Old  Age: 
Cost  of  Maintenance,  3,  4,  6. 
Dependents,  3. 

Incomes  and  Expenses  in,  12, 13. 
In  England,  14. 
In  Massachusetts,  5,  6. 
In  the  United  States,  6. 
Miseries  of,  15-16. 
Misfortunes  of,  23,  24  2g. 
Non-dependent,  5, 12,  13. 
Pen  Picture  of,  15-16. 
Pensioners,  6,  it. 

Savings  for  Impossii^,  jo,  348, 349, 353,  357.  3S9,  367,  36S,  381. 
Statistics  on,  4. 
Pauperism : 
After  Sixty-five,  14,  3ig. 
Due  to  Misfortune,  35. 
Increase,  8,  9. 

Makes  Huift  Impossible,  359. 
To  Be  Eliminated,  242. 
Paupers : 
Defective,  29. 


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358 


TOPICAL  INDEX 


In  Almshouse?,  fi 
Increase  over  Sixty-five,  8,  9. 
In  Great  Britain,  14. 
In  Massachusetts,  14. 
Mental  Condition,  2,^. 
PcrccntaKC  of,  in  Various  Pursuits,  50. 
Pensions : 
A  Model  Fund,  274-277. 
Amount  of,  11. 

By  Compulsory  Contributions,  328-330. 
By  Deductions  from  Wages,  271-282. 

By  Purchase,  262-204. 

Concept  of  Service  Pension,  3x1,  313,  316,  321. 

Confederate,  6,  2.u-2,52. 

Compulsory,  as  in  Trance,  ,5o6-,soq. 

Compulsory,  as  in  Germany,  298-300. 

Contributory  Plans.  271-282,  3ig. 

Cost  of  a  National  Scheme,  320,  321,  329. 

Dangers  in  Industrial,  277-282. 

Economic  Motives  for,  73,  105-106,  120,  27s,  313. 

First  Pension  Bill  in  England,  235. 

For  Firemen,  211-222. 

For  Other  Municipal  Employees,  223-328. 

For  Policemen,  193-211. 

For  Teachers,  139-192,  348. 

Government,  229-235. 

Individualism  Opposes,  325. 

In  Industrial  Establishments,  72-108. 

In  Railroad  Service,  iog-128. 

In  Steamship  Companies,  136-138. 

Municipal,  193-227. 

Municipal  in  Europe,  223. 

Non-contributory  Schemes,  121,  301-303. 

Not  Detrimental  to  Thrift,  314,  336. 

Objections  to  Universal,  314-317,  327-329. 

On  Electric  L'nes,  128-136. 

On  the  "Group"  Plan,  270. 

Proposal  tor  Municipal  in  New  York  City,  227-228. 
Proposed  for  Postal  Employees,  255-257. 
Proposed  National  Pension  Bills : 

Berger,  234,  3.59. 

Wilson,  311,  344. 
Relation  to  Conservation,  323. 
Schemes  and  Funds,  274-277. 
Service,  295-337. 
State,  232-235. 

The  Thomas  Paine  Proposal,  32? 
Through  the  Carmrii'  Foundation,  186-192. 
United  States  and  IVlassachusL'tts,  6. 
Universal,  as  in  England,  304-305. 


TOPICAL  INDEX 


Universal,  as  in  New  South  Wales,  302. 

Universal,  as  in  New  Zealand,  302. 

Universal,  as  in  Victoria,  .50,5. 

Voluntary  Assoriations,  27,?-27q. 

Wage-earners'  Objections  to,  279-382. 
Police  Pension  Funds,  194-211. 
Poor  Relief ; 

Amount  of,  6. 

For  Aged  Dependents,  6. 

Forms  of,  4,  10. 

Humiliating,  54. 

Inadequate,  240. 
Population : 

Able-bodied  in  Almshouses,  13, 

Almshouse,  6,  g,  319. 

Defective  in  Almshouses,  29. 

Dependent  over  Sixty-five,  6,  14. 

Poor,  Great  Britain,  14. 
Massachusetts,  14. 

Proportion  Dependent,  13. 

Proportion  Poverty-stricken,  46. 

Trend  to  Manufacturing  Centers,  7. 

Unemployed,  30-37. 

Urban  and  Rural,  7,  8. 
Poverty : 

Cause,  24,  25. 

Due  to  Accidents,  26-27. 

Elimination,  242. 

Number  in,  46. 

Surrender  to,  23. 

Trend  to,  239. 

Unemployment  as  Cause,  30-32. 
Profit-sharing  Schemes,  106. 
Revolution,  Industrial  at  Hand,  240-242,  254,  260. 
Savings  for  Old  Age : 

Absorbed  through  Illness,  27. 

Impossible  on  Low  Wages,  50,  248,  240,  2S3.  »S7i  »59i  i^J,  s68,  281. 

Lost  by  Misfortune,  25,  28,  250. 
Superannuation : 
Allowances  in  Labor  Organizations,  55-66. 
In  Industrial  Establishments,  72-108. 
In  Steamship  Companies,  136-138. 
In  the  Railroad  Service,  110-128. 
Of  Postal  Employees,  255-257. 
Of  Teachers,  139-192. 
On  Electric  Lines,  12S-136. 

Table  of  Rates  for  Annuities  tc  Letter  Carrien,  60-61. 
Teachers'  Retirement  Funds,  139-192,  348. 
Thrift: 

As  Affected  by  Drink,  258. 


360 


TOPICAL  INDEX 


Hard  to  Cultivate,  j.jo- 
Massachusetts  Commission  Report  on,  345. 
OM  Age  Pensions  and,  314,  337. 
Societies  for  Encouraging,  J46. 
The  VVurkingman's  View  of,  239. 
Through  Savings  Banks,  247. 
Transportation  Companies,  109-138; 
(0)  Steam  Railroad?,  1 10-128: 

Atchison,  Topcka  and  Santa  Fe  Railway.  II6. 

Atlantic  Coast  Line  Railroad,  115. 

Baltimore  and  Ohio  Railroad,  no. 

Buffalo.  Rochester  and  Pitt^urgh  Railroad  Company,  115. 

Canadian  I'acific,  119. 

Chicago  anil  North  Western,  in. 

Chicago,  Rock  Island  and  Pacific  Railway,  116. 

Chicago,  St.  Paul,  Minneapolis  and  Omaha  Railway  Company,  115. 

Cleveland  Terminal  and  Valley  Railway,  in. 

Delaware,  Lackawanna  and  Western  Railroad,  1x3. 

Ferrocarriles  Nacionales  de  Mexico,  n8. 

Grand  Tr  ink  Railway,  iiq. 

Great  Central  Railway  (England),  135. 

Great  Eastern  Railway  (England),  124. 

Illinois  Central  Railroad,  1:2. 

London  and  Northwestern  Railway  (England),  laS. 

Midland  Railway  (England),  122. 

Minneapolis,  St.  Paul  and  Sault  "^te.  Marie  Railway  Company,  117. 

New  York  Central  and  Hudson  -xiter  Railroad,  116. 

New  York,  New  Haven  and  Hartford  Railway,  117, 137. 

Pennsylvania  Lines  West  of  Pittsburgh,  112. 

Pennsylvania  Railroad,  in. 

Philadelphia  and  Reading  Railway  Company,  X13. 

San  Antonio  and  Aransas  Pass  Railway  Company,  113. 

Southern  Pacific  Company,  114,  137. 
(6)  Electric  Lines,  128-136  : 

Boston  Elevated  Railway  Company,  ii8. 

Brooklyn  Rapid  Transit  System,  131. 

Denver  City  Tramway  System,  129. 

New  Bedford  (Massachtwetts)  Electric  Lines,  13a, 

Omaha  Railway,  131. 

Philadelphia  Rapid  Transit  Company,  132. 

Public  Service  Corporation  of  New  Jers^,  134, 

I'nited  Traction  and  Electric  Company,  135. 

West  Penn  Railways  Company,  134. 
(c)  Steamship  Compuiilcs,  130-136: 

Atlantic  Steamship  Lines  and  Pacific  Mail  Steamship  Compaoy,  137. 

New  England  Navigation  Company,  137. 

Old  Dominion  Steamship  Company,  137. 
Unemployment : 
Benefits  for,  37. 
Nimibers,  32-35. 


TOPICAL  INDEX 


361 


Over  Age  Forty,  36. 

Proportion  of  Workers,  3>- 

Through  Sickness  and  Acddeat,  26-39< 

Time  Lost,  30-3t- 

Wages  Affected  by,  39. 
Unrest: 

In  England,  ate. 

Worldwide,  Described,  240-143. 
Wage-eamm: 

Accidents,  36. 

Dependent,  9. 

Expenses  of,  in  Illness,  37,  aS. 
Illness,  36-39. 
Intemperate,  33,  358-359. 
Number  in  United  States,  3,  395. 
Number  over  Sixty-five,  3,  5,  6, 12, 14,  334. 
Physical  Condition  of,  39. 

Savings  of,  it,  35,  37,  38,  348,  349,  353,  357,  359,  367,  368,  381. 
Thrift  among,  349,  359,  337. 
Time  Lost,  30-31- 

Unable  to  Purchase  Annuities,  367,  369, 370. 
Unemployed,  33-35. 
Wages: 
Average,  49. 
Census  Summaries,  49. 
Deductions  from,  for  Pensions,  371-383. 
Effects  of  Adequate,  360-361. 
Forecast  of,  49-50. 
How  Faed,  38. 

Inadequate,  40, 46.  348,  349,  351,  355,  396. 

Increase  of,  43-47. 

In  Various  Industries,  49. 

Low  Daily,  41-43. 

Minimum  Standard,  39, 41-46,  349. 

Occupational,  40, 49. 

Sub-standard,  41. 

To  Civic  Ineffidents,  335. 

Variation  by  Industries,  47. 


'^HE  following  pages  contain  advertisements  of  » 
few  Macmillan  publications  on  kindred  subjects 


The  Social  Unrest 

StudiM  in  Labor  tad  Social  MowaMBtf 

Cloth,  lamo,  304  pages,  %i.^o  net 
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"  Mr.  Brooks  does  not  guess.  He  has  been  in  the  mines,  in  the  fac- 
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years  of  investigation."  -  -  Collier's  Weekly. 

"The  author,  Mr.  John  Graham  Brooks,  takes  up  and  discusses  through 
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people.  .  .  .  Nothing  upon  his  subject  so  comprehensive  and  at  the  same 
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its  equal  candor  and  intelligence  witn  regard  to  the  employers  should  have 
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"  Perhaps  the  most  valuable  portion  of  it  is  that  which  treats  of  French 
and  German  Socialism,  in  the  knowledge  of  which  the  author  probably 
has  few  superiors  in  this  country." — lAttrary  Digest. 


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Chnstianity  and  the  Social  Crisis 

By  THE  Rev.  WALTER  RAUSCHENBUSCH 
l^ufoiaor  of  Gtuich  HiMory  in  Rochester  Theological  Semina. 

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The  Approach  to  the  Social  Question 

An  Introduction  tcj  the  Study  of  Social  Kthics 

Bv  FRANCIS  GREENWOOD  PEABODY 
Plommer  Professor  of  Christian  Moralt  in  Harvard  University 
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Success  Through  Self-Help 

By  NEWELL  DWIGHT  HILUS 

Author  of  "The  Quest  of  Happiness,"  "The  Infiueoce  of  Christ 

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By  SCO'^T  NEARING,  Ph.D. 

Of  the  Wharton  School,  Univenity  of  Penasylvtnk 

Social  Adjustment 

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Economics 

By  SCOTT  NEARING  and  FRANK  D.  WATSON 
Both  Instructors  in  Political  Ecunomy  in  the  Wharton  School  of 
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The  buv=  Ui!.    sses  the  whole  subject  of  n'osperity  of  the  (actors  which 
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Democracy  and  Social  Ethics 

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Jane  Addams's  work  at  Hull-House  is  known  throughout  the  civilized 
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